How are bitcoin, cryptowallets and blockchain related? Zamani does not work for, consult, own shares in or receive funding from any company or organisation that cost benefit analysis of bitcoin mining benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment. De Montfort University provides funding as a member of The Conversation UK. The Conversation UK receives funding from Hefce, Hefcw, SAGE, SFC, RCUK, The Nuffield Foundation, The Ogden Trust, The Royal Society, The Wellcome Trust, Esmée Fairbairn Foundation and The Alliance for Useful Evidence, as well as sixty five university members.
When the bitcoin was first introduced eight years ago, it promised to change payments. We were first told in 2009 that many transactions would be verifiable and validated by the bitcoin protocol. However, as we argued in a recent study, a significant adoption barrier to bitcoin is the lack of usability. Since the inception of cryptocurrency, developers and researchers have been using metaphors to explain bitcoin in a clear effort to help people feel more comfortable with the technology. ATMs have emerged for bitcoin-based transactions.
Using metaphors to refer to these technologies helps people feel more familiar with the technology. But there is also a downside: people expect that the technology can be used as regular money. I get refunds for paying for stuff? I get change if I don’t have the exact amount? They are merely entries in a highly secure, very restricted database. There are no wallets, crypto or otherwise. And, in the bitcoin world, there are many transactions that can’t mimic how regular money works.
It’s time to end the confusion over bitcoin. If I pay for something with pound notes and then regret my purchase, I can return the item to the shop and the shop may or may not issue a refund. But the bitcoin protocol doesn’t allow this. If a transfer of bitcoins has been broadcast to the network, by design that transaction is final. X marks the spot To support the adoption of bitcoin as an alternative payment, we need to have a system that is cheaper, better and more desirable compared with other forms of payments, such as debit cards. Some merchants will pay the fee themselves, or roll this cost over to the consumer, as an extra charge for paying by card. Paying in bitcoins has zero cost or very low cost, subject to how much of a hurry the consumer is in.