Bitcoin credit cards were a private initiative started in 2009. This type of currency is not governed by a central monetary authority like that of Dollar, Euro or Sterling. It is basically a digital form of payment which is produced by various people all over the world. The operation of these cards is based upon peer-to-peer network across the globe for free or at very nominal costs.
Bitcoins are the basic unit for any value however, they are further subdivided into satoshies whereas, one satoshi is equal to one hundred millionth of a bitcoin or it can be said that a bitcoin is divided with eight decimal places.
The functioning of bitcoin credit cards facilitates easy transferring from one internet user to that of another in the form of payment for goods and services at very low or virtually no cost. In this way, international transfers can be made easily without having the hassle of dealing with onerous bank rates as well as with exchange rates. Moreover, these credit cards can also be bought as well as sold for hard cash from special exchanges.
Bitcoin Credit Cards wallet
For using these cards, installing a wallet is considered important. This is an application through which bitcoins can be sent and received. These wallets are of three kinds - mobile wallets, software wallets and web wallets.
Mobile wallets are installed in cell phones or smartphones and allow the owner to use it in superstores and in shops for making purchases by scanning a quick response (QR) code. Similar to this, software wallets are installed on your system and offers complete control over the wallet. Web wallets are available on the World Wide Web and they operate in the form of cloud storage.
Making payments through bitcoin credit cards is very easy. All you have to do is to enter in the address of the receiver as well as the amount after which you have to press send. Even smartphones and tablets can have the receiver’s address through scanning the QR code or by having two phones which comprises of the near field communication feature (NFC) which is a form of radio communication when they are close by.
Benefits of bitcoin credit cards
-There is no limit set for sending or receiving amounts and you can make transactions instantly from any place in the world and at anytime.
-The transactions associated with bitcoins are irreversible which eventually protects the sellers from fraudulent activities which are quite common in using general purpose credit cards.
-There is simply very little or no processing fees.
-Protection against identity theft is offered since the transactions are carried out without exchanging personal information.
-The process of receiving and paying is predictable, transparent and neutral.
Drawbacks of Bitcoin credit cards
-Since they are not governed by a central monetary authority, they are not accepted universally and cannot be used everywhere.
-Having the quantity of bitcoin credit cards in the economy to be very low, their value is quite volatile which has a direct effect on the price of small transactions.