Just a few short years ago, many people were excited about the Bitcoin and the possibilities the virtual currency opened up.
For the Tourism industry, it would help relieve international travelers from the burden of dealing with multiple currencies, payment methods and exchange rates. A currency that was not controlled at the will of politicians or by any government seemed especially attractive in the wake of the global financial crisis, which left many people skeptical of banks and financial institutions. While the idea had started online with tech savvy people, it soon spread across the globe, appealing to anyone who wanted to take back power from Wall Street.
But has the currency really lived up to its potential in the years since its introduction?
What is a bitcoin and how does it work?
Bitcoin is a digital form of currency that allows users to pay for goods and services without money actually changing hands. Using a virtual wallet accessible from a computer or smartphone, users can send Bitcoin payments to anyone willing to accept them. For users who do business internationally or travel often, Bitcoin provides even more advantages because it does not use an exchange rate the way regular currency does. This means the true cost of purchases is easy to calculate.
Another advantage of using Bitcoin is the lack of personal information connected with the payment medium. Unlike a credit card or even a Paypal account, paying someone with Bitcoin is done without providing a billing address or zip code.
Bitcoin can also function as a stock or an investment for savvy buyers. If you buy Bitcoins at a time where they are not in high demand, and re-sell them at a later time when they have a higher value, you can potentially make a large profit on the sale. This is because the value of a Bitcoion can fluctuate based on market demand.
How have bitcoins affected global commerce?
As with many new inventions that hope to revolutionize an industry, the success of Bitcoin is partially dependent on the adoption rate among both the general population and merchants. Unfortunately, in many parts of the world, Bitcoin simply hasn’t caught on as fast as supporters would have hoped. With only a few merchants accepting the payment method, consumers are somewhat reluctant to fill their Bitcoin wallets, knowing it may be difficult to find places to spend the virtual currency.
This reluctance among regular consumers and the anonymity of Bitcoin transactions has led to some reputation problems for the currency. Many people speculate that because Bitcoin is so anonymous, the main use for it is to purchase illegal goods or complete shady transactions. The currency was involved in the scandal surrounding the Silk Road website, where many people used Bitcoins to anonymously purchase illegal items like drugs or weapons. It can also be hard for legitimate customers who are interested in buying Bitcoins to find a reputable seller online, and some people have been scammed out of money while trying to buy them. This only adds to the reputation problems.
While Bitcoin may be the currency of the future, a look at the current state of affairs shows that there is still work to be done before Bitcoin is accepted on a global scale. Only time will tell if Bitcoin will become a real force in the global economy, and help solve a pain point for international tourism. Today it already serves as a reminder that trust is key for any new business venture. This is good news for hospitality professionals for whom building customer trust is second nature.
