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Why do I use Bitcoin?

I wouldn’t describe myself as a Bitcoin radical or someone who is crazy about Bitcoin, but I am excited by it. I like some of what it does and how it works, but I wouldn’t say I’m a fanatic (says the guy who made a blog about it).

Bitcoin has a few positives that I really like, compared with other digital payment systems. One payment system that a lot of Bitcoiners like to hate on is PayPal and I too see Bitcoin as being superior in most cases compared with Paypal. The one case that I come across time and again that I prefer about Bitcoin versus Paypal, but really can be applied to most online payment systems, is the payment process itself. Let me explain: when you do a transaction using Paypal on a third party site, like NewEgg, Paypal doesn’t know who you are. Because of that, the natural and pretty much mandatory requirement is that you log in. Of all the websites on the internet, I’m not sure any are forged more often than Paypal. Because of that, I always hesitate whenever I see a Paypal log in. Every time. For me, Google Wallet is usually a little better because I’m always signed into Google’s services. Naturally, if I was always signed into Paypal it would probably be better. Regardless, as it is that just seems bad. Granted, I’m not sure how else you would do it. The person has to be identified somehow and the way to do that is to log in. So maybe it can’t be fixed.

With Bitcoin, however when I get to the checkout an address (like an e-mail address) is provided. When I click on that, some software on my computer that I installed previously appears. That is my wallet. The information I need to pay the store is already filled out in my wallet and I simply have to verify the amount and hit send. To me, this feels less like a giant security issue waiting to happen. If the wallet that appeared wasn’t mine, then the store wouldn’t be paid. If the wallet that does appear is mine, but wrong information is filled out like the amount, I can correct that. Through this method, there isn’t really anything that can be forged that will compromise my wallet. That isn’t to say there aren’t ways of getting someone’s wallet, but this isn’t one of them.

Now, comparing Paypal to Bitcoin, there are some positives to Paypal you simply don’t have with Bitcoin by design. For example if you have a problem with your order or the store you’re buying from, you can do a chargeback with Paypal. With Bitcoin, the same chargeback is technically impossible. Also, with Paypal if you accidentally send your money to the wrong location, you can call Paypal and maybe get your money back. Success rates might vary but it is a possibility. With Bitcoin, if you enter the wrong address, chances are it’s invalid. But assuming it’s a valid address and it’s not the one you mean to send money to, any coins you send to it are gone forever. You cannot get them back unless you know who owns the address and they are willing to return your money.

One final downside to Bitcoin, at least presently, is that Bitcoin is still new and still very experimental. Not everything functions perfectly. Just tonight I was buying some computer equipment to fix one of my systems and the checkout I was going through wasn’t quite working correctly. Over time I see this getting more refined and more robust, but for now one has to expect some hiccups. Buying from places with great customer support makes this much less worrisome.

So, to sum up: I like Bitcoin and use it because I perceive the security to be higher for my use cases. I also have more control over my money as compared with most other online payment systems because I control the keys. I’m not personally worried as much about needing chargebacks so that doesn’t bother me too much. Finally, I’m eagerly waiting for more robust checkout processes (I know BitPay is hard at work!) and anticipate much smoother pay flows in the near future.

If you don’t see the improved security or don’t need ridiculously cheap money transfers, the using an existing payment system might be the way to go.

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