The e-book is designed to help everyone, who is not familiar with cryptocurrencies, understand the basics of Bitcoin and blockchain technology. The book consists of 7 chapters, and each covers a particular topic. First, let’s look at the lessons extracted from the e-book. These are seven main problems that arise in society due to credit cards.
Credit Cards are not Secure.
When paying with a card, the system does not atomically transfer money from your account to the seller’s account. As a result, the transaction takes time, during which the total balance on the card is usually unreasonably large compared to the temporarily increased funds in your wallet/ bank account.
It creates an opportunity to commit fraud, like using the card after your payment is processed without your knowledge or stealing credit card information and then using it for purchases.
Credit Cards are not Independent of Banks.
The issuer of the credit card (your bank) can block or cancel your payments on its own if they consider them to be suspicious.
Merchants must pay a fee.
Transaction fees affect the goods & services that you buy. For example, the fees paid for accepting credit cards are usually 2-5%, which means that they increase your purchase price. Merchants can also mark up their products’ prices to cover their fees (charging you more than you would pay if paying with cash).
Credit Cards are not Anonymous.
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Receiving Payments through credit cards is not Instantaneous.
It takes time to process payments on payment networks, which means that your payment can be blocked or reversed during this time.
It is Difficult to Protect Purchases from Third Parties.
The transaction details are stored in a centralized database when you pay by card. If a third party gets access to it, they might hold your account hostage and demand ransom or use your information for other illegal activities.
Sending & Receiving money from other People is not Fraud-Proof.
Multiple intermediaries access your bank account and credit card numbers when sending money to another person. It means that a hacker can intercept or delete the transaction before it reaches its recipient. The solution to all these problems lies in the use of cryptocurrencies.
Cryptocurrencies are not Stored on Banks.
Instead, all cryptocurrencies, including Bitcoin, Ethereum, and others, are kept in unique wallets (e-wallets). E-Wallets provide the same functionality as bank accounts do with fiat currencies – managing funds and making payments.
But unlike banks, which require their customers to create new accounts, cryptocurrency wallets are created automatically upon your first transaction. They also protect your anonymity, do not have processing fees, and can be used instantly to send transactions anywhere in the world.
Cryptocurrencies are decentralized.
No central authority – like a bank or credit card company – would regulate cryptocurrencies, so there are no middleman fees. Instead, all transactions are stored on the blockchain, which is publicly available for everyone to see.
Cryptocurrencies operate on Floating Exchange Rates.
The exchange rate between cryptocurrencies (such as Bitcoin and Etherium) fluctuates daily, depending on supply and demand. However, cryptocurrencies can be instantly exchanged into fiat currencies at cryptocurrency exchanges.
Sending & Receiving Money is Instantaneous.
Digital wallets carry the exchange rate at the time of your transaction so that you can send or receive cryptocurrencies anywhere around the world within minutes without any intermediary fees.
It is Easy to Protect Purchases from Third Parties.
Cryptographic algorithms secure cryptocurrencies, so payment details are never sent over the network. In addition, you can protect transactions yourself by using a private key or wallet password.
Cryptocurrencies are Anonymous.
Transactions cannot be traced back to your e-wallet address, so cryptocurrencies provide much better anonymity than credit cards do.
It is Easy to Monitor and Protect your Money.
E-Wallets come with a particular browser extension, which allows you to see all of your incoming and outgoing transactions and control their flow. You can also protect your funds by setting up 2 Factor Authentication (2FA).
