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Whether Bitcoin Is Reliable Currency to Use Offline?

15.03.2016

Bitcoin is a universal payment unit. However, despite obvious advantages it is not widely distributed. Bitcoin-wallet holders face some difficulties in real life.
Why do vendors refuse to accept Bitcoin?
Small and medium business representatives unwillingly accept the alternative monetary unit for several reasons:

  • Insufficient number of clients uses unusual payment method, so it is difficult to cover losses related to exchange rate fluctuation.
  • Necessity in additional complex accounting.
  • Businessmen who work with Bitcoin call it “marketing promotion”. Due to limited circulation the cryptocurrncy just highlights an innovative image of a company without significant boost in income.

Common example is Pey – the company has reached significant success in distributing in-house Bitcoin-terminals in Hannover. Software can be installed on smartphones with Android OS and built-in NFC-chip. Thanks to 3D-printed case, the application superficially similar to standard payment terminals.
The company offers the new product free but charges commission for transactions. Despite comfort of this innovation, introduction of intermediary services in Bitcoin-payment sector contradicts to cryptocurrency philosophy. Only a small number of companies accepting the alternative monetary unit refused from mediatory payment-processing services. For example, Joerg Platzer, the owner of café Room77 in Berlin. He is a Bitcoin enthusiast, and his café became the first place in the world to accept cryptocurrency.
 
Inconvenience
Before introduction of Common European Currency, travelers had to convert their cash into various monetary units. However, euro hasn’t become “cure-all”. Some countries – members of the EU (Poland, Czech Republic) haven’t refuse from their own currency. Ideally, cryptocurrency should become a universal currency of global scale. Yet still, this is not the case. Value of Bitcoin is measured in fiat money.
Users are wondering: Where is the exchange rate originated from? There are two variants:

  • Most of vendors determine current exchange rate of Bitcoin to other currencies on their own. Rather often it differs greatly from real market value of virtual coins.
  • Only few vendors provide their Bitcoin-wallet address to accept payments for goods and services.

The greater part of online-wallets has an option of automated conversion of fiduciary money into cryptocurrency. The problem of determining the actual Bitcoin rate to fiat currencies becomes especially urgent in the background of continuous growth in number and volume of money transfers.
 
Comfort at the expense of security
Effecting payments with Bitcoins brings in some inconvenience. Searching in smarphone menu for special application, scanning QR-code and other operations take a lot of time. Mediatory services not only quicken the transaction rate but make them more comfortable. But acceleration of transaction processing weakens security standards. NFC-chip carries out payment via transferring a secret key to a terminal. Whereby a customer provides a vendor with the access to the information required for withdrawing funds.
Bitcoin offers an alternative solution in the form of push-payments. A customer receives an opportunity to send the indicated amount to a specific wallet. There is no need in transferring a private key.
 
200 b on roaming
With development of wireless networks local data transfer loses popularity and becomes a thing from the past. Bluetooth is less used for transferring files from one phone to another one; it’s much easier to send a photo or a document via e-mail or messenger. As for transferring files from phones to a PC without Internet access, the situation is indeed difficult.
Many people recommend Bitcoin to travelers, but in this case also problems may arise. Without stable access to the Internet it is impossible to make a payment. But story is not complete yet. You may make as many attempts to perform transaction as you like with no or bad access – transactions won’t be performed. But when you’ll connect to the network, all assigned tasks will be performed. The problem of Bitcoin-wallet is that it is impossible to cancel or delete unsuccessful operation, and it will be carried out with restored access to the Internet.
Surprisingly, phones and PCs are capable of storing huge information volumes counted in giga- and terabytes. Bitcoin transactions occupy minimum space but they are impossible to be carried out without Internet. Moreover, many Bitcoin recipients have to wait for confirmations rather long time. Practically, the receiving party always has access to the network. So, why not to transfer funds to a PC or a smartphone of the recipient without using network? Especially, such a transaction can easily fit a QR-code.
 
As of now, Bitcoin is still not ready to get the status of a reliable payment method for settlements in offline mode. It is challenging even to pay for a cup of tea. So, cash in your pocket is always useful.