Three reasons NOT to use Bitcoin with Three reasons TO use a crypto payment system
There is a lot of hype about using Bitcoin as a form of payment while some of the hype is deserved there are important reasons not to use Bitcoin directly. Unless you have Bitcoin, you purchase when it was a lot cheaper, or you want Bitcoin these are three reasons not to use Bitcoin as a form of payment for everyday purchases.
Reason One
Bitcoin is a volatile virtual coin whereits value isderived from the open market. As a result,the value is constantly changing making it unstable for payments. The value one day can be$50,000 and the next $45,000 or $55,000 only the market knows for sure. Either way it is not a very stable form of payment.
Unless the goal of the transaction is to acquire or use Bitcoins you already own the value of the transaction will fluctuate with the price of Bitcoin.
The only way to lock in value is to convert the Bitcoin to a stable coin or convert to fiat instantly at the end of the transaction which adds cost and undermines the use of Bitcoin.
Reason Two
Unless the transaction was to use and acquire Bitcoin there needs to be a conversion from Bitcoin to fiat currency or another crypto coin. Both buyer and seller must have compatible Bitcoin wallets to handle a direct transaction. If the buyer does not own Bitcoin, it must be purchased on an exchange or directly from a seller either way it requires a fiat or crypto transaction. This adds an extra step the same is true in reverse if you are the seller and do not want to hold Bitcoin. Without a secure wallet personal Bitcoins are in danger of being lost or stolen.
Unless the goal of the transaction is to acquire or use Bitcoins you already own the value of the transaction will fluctuate with the price of Bitcoin.
The only way to lock in value is to convert the Bitcoin to a stable coin or convert to fiat instantly at the end of the transaction which adds cost and undermines the use of Bitcoin.
Reason Three
Bitcoin transaction can create unintended tax consequences for the buyersand sellers. Some countries tax the gain in value as a result of a transactionwhich could apply to all parties of the transaction. The gain is determined based on the cost of the Bitcoin and the value received for the Bitcoin.
For example, in the United States crypto is considered property not money so if you use Bitcoin you purchase for $20,000,to buy a car when Bitcoin is worth $50,000 then the difference between the cost of your Bitcoin ($50,000 -$20,000 = $30,000 gain) the value of the purchase determines the profit or loss on the transaction.
This simple purchase would result in taxable income of $30,000. This will not impact those in countries where crypto profits are not taxed but for everyone else it is an added cost.
Three reason to use a token-based payment system
Blockchain technology was developed to make funds transfers safer, more secure, faster, and cheaper by bypassing traditional financial institutions. Companies like CFX Networx use Blockchain technology for all the advantage Blockchain offers to itsaccount holderswhile eliminating many of the disadvantage of alternative payment systems.
Reason One
The actual fundstransfer uses tokens which have the advantage of representing any value chosen at the time of the transfer. To transfer $25,000 USDT to a merchant in Europe the systemconverts the USTD to tokens during the transfer to the merchants account where it can remain in tokens or received in Euro or crypto. The value of the transaction is the fixed at transfer rates so neither the buyer or seller loses or gains value due to market volatility.
Reason Two
Specialized crypto payment systems uses private tokens as a means of transfer between transferring parties. This adds a level of privacy and security not found in traditional networks where banks, credit card companies, along with other third parties use the information for marketing purpose by tracking the transactions and storing the information is a single database that can be hacked.
Reason Three
Having an account on a specialized exchange like CFXN will allow the account holders greater control over their funds be it fiat or crypto or a variety of each. Account holders can select the form of payment and the seller can choose the form of payment received. Account holders can use their deposits to generate income for themselves and not the exchange. Unlike banks which use deposit for their own profits some exchanges allow the account holders to generate income with their own funds.
Tax consequences can be managed within a specialized exchange as the transfer token is not owned by either the buyer or seller the tokens are only a means of transfer from one account to another. Once transfer is made the account holder determines the type of unit sent or received.
In summary, not all crypto payment systems or transactions are the same with privacy, security or value. It is important to know the difference options based on your specific needs. If you are doing a onetime transfer, then it does not really matter as much but if you are a merchant with hundreds or thousands of buyers then the system you use for crypto payments is very important.
