The legacy, balkanized financial system was laid bare on the 29th of September in a reddit thread where users from around the world shared their experience of purchasing bitcoins from Circle, a VC-backed company, which finally announced open registration for all customers across the globe…
While Bitcoin proved itself to be global with users across the world providing feedback on their ability to purchase bitcoins via Circle with a credit or debit card, the inconsistent payment processing by banks showed the legacy system to be very much fragmented and limited within its own borders.
As one might expect, it is not possible to buy bitcoins with a credit or debit card from China, which prohibited banks from dealing with Bitcoin in late 2013, but seems to have softened its stance as Bitcoin trading volume in Chinese exchanges returns to its previous market share and attendance at Bitcoin conferences in mainland China is reported to be in the thousands.
Nor is it possible to buy bitcoins in Argentina according to user reports, a country that currently suffers from high inflation and has taken draconian measures to limit capital flight.
Puzzlingly, Serbia is another country where purchasing bitcoins with a credit or debit card via Circle is not possible. The country has recently dipped back into recession and has suffered an inflation rate of 7-8% for more than a decade.
All three countries show a payment system highly dependent on public or covert state agendas which may or may not have been widely debated or mandated by the voting public. The national governments of those countries have excessive power over the economy which is often abused, leading to high inflation, as in the case of Argentina and Serbia, or to an uncertain economic environment in the case of China.
Furthermore, the banks’ and payment processors’ ability to deny a voluntary and legal purchase in the case of Serbia and Argentina illustrates the surrender of purchasing power by the ordinary man to private for-profit entities unconstrained by any legal limits on payments they can or can not deny, thus leaving open capricious constrictions of a vital financial service, which has led to millions of marginalized unbanked who find it far more difficult to efficiently exchange value.
From Guatemala to India and across all continents, including most of Europe, North and South America, Australia, South Africa and the Philippines, to buy a bitcoin is now as easy as setting up a Circle account. The process is slick and professional with a time estimate from sign up to bitcoins in your wallet of two minutes or less according to numerous first-time users.
Gone are the times when you had to sign up for a Dwolla or Liberty Reserve account by sending cash via Western Union and then transfer the funds to MT Gox. Circle is as easy, quick and intuitive as purchasing a book from Amazon, and as global as the Internet itself.
For US consumers, Circle is completely free if a bank account is linked. Globally, users from around the world can instantly buy bitcoins with their credit or debit card for a fee of 2.9% levied by the credit card providers which may vary depending on the payment processor. However, some users are reporting that some banks or payment processors do not work while some others do work, for any given specific country, showing a fragmented banking system rather than a national policy.
Bitcoin removes all these banking inconsistencies. Returning purchasing power to the ordinary man and streamlining the exchange of value across borders, making money transfer easy and instant across continents as well as locally.
The legacy system, which itself is a middleman, needed another middleman to make payments and transfers more convenient for users online: PayPal. Founded in 1999, PayPal started out as a means to send money via an e-mail address and found widespread adoption due to its convenience in sending or spending money privately as well as with merchants.
Bitcoin improves upon PayPal by providing a bank account for anyone and everyone without prejudice, higher privacy, a quicker and more convenient payment system once the bitcoins have been acquired, far lower fees, irreversible transactions, and accounts that cannot be closed, without needing permission from any third party to perform a transaction. Thus Bitcoin makes sending and spending money instant and without any friction whatsoever.
Compared to the banking system itself, Bitcoin is futuristic. To transfer money via your bank account you firstly need to log in, which is a lengthy process, requiring you to find your card first and answer all the security questions and satisfy any two or three factor authentication that may be required. You would then need to manually enter the lengthy card numbers and name of the receiver as well as numerous other details that you may be asked. With Bitcoin, you simply need to copy and paste the address and send.
For purchases, it’s no different. With a credit or debit card, you need to manually enter the lengthy numbers which you need to double or triple check. With Bitcoin, you just send, making the process far easier for the Internet is the natural environment of the magic digital money.
Therefore, Circle is now as easy as PayPal and, with Bitcoin improving upon PayPal’s initial unique selling points, it is reasonable to expect that anyone who wanted a PayPal account will now want Bitcoin. Furthermore, with merchants widely adopting and promoting bitcoin payments, Bitcoin may soon be accepted everywhere, just as PayPal. We therefore stand to experience interesting times ahead.
Images from Circle and Shutterstock.
Last modified: January 3, 2020 3:22 PM UTC