Chapter 2: As mentionedin first part of the report, with the rapid development of today’s modernsociety, along with the explosion of the Information Technology, money has beenused as digital values stored on computer or electronic device. Users canperform electronic transactions by transferring digital values from onecomputer (or electronic device) to another (or electronic device). This kind ofmoney is called electronic money- virtual money. You may havenoticed that virtual currencies such as Bitcoin, Ertherum, Litecoin, Dagecoin,or even Darkcoin, are gradually appearing on the payment symbols of commercialwebsites. And in theNetherlands, the popularity of virtual currency is really popular or not? Theanswer is yes! According toa newspaper article that showed the popularity of virtual currency in theNetherlands in September 2017, the number of Bitcoin users is increasing, alongwith other virtual currencies such as Etherium and Litecoin.
Besides, TheNetherlands boasts a “private Bitcoin city” in Arnhem. Arnhem islocated in the East of Holland – an ancient city with paved roads and bicycleson every corner. Thanks to Bitkassa, a Dutch company providing a payment solutionsimilar to Bitpay, more than 150 retailers in Arnhem have accepted Bitcoin indaily transactions. You can trade at any store in this city, from privateshops or stores of famous brands like Burger King, Spar, … However, thecryptocurrency is not currently within the legal and financial supervisionframework in the Netherlands. This is the reason why so many business projectshave been launched, from Bitcoin ATM to Bitcoin Embassy, ??located in theheart of Amsterdam. The BitcoinAmsterdam Embassy Association is a not-for-profit organization with a broadervision of Blockchain and peer-to-peer (digital) technology to become a bridgebetween individuals and businesses.
through the media. Since then, it has contributedto the development of virtual currency and launching potential projects. In addition, the country’s banks, including ABN Amro and INGBank, are increasingly looking towards Bitcoin and Blockchain as a way toimprove their technology and optimize their costs. The country is also the homeof the bitcoin trading platform and is home to many startup companies- cryptocurrency and ICO. For professionals in the IT industry, virtual currency andits way of transaction is no longer so strange.
In contrast, for those who donot know about it, how to transaction and payment with virtual currency? Because bitcoin is the most commonly used virtual currency,we will take its transaction as a typical example. For traders, the first thing a merchant should do whenplanning on accepting Bitcoin at their online store is to figure out how theywant to handle digital currency. They will receive a Bitcoin wallet and thefirst trading numbers with the currency. To understand clearly, Bitcoin walletis similar to a Bitcoin bank account to contain your crypto currency. You canreceive bitcoin, store bitcoin, bill payment with bitcoin and send bitcoin toothers when you have a Bitcoin wallet. They can create it via Blockchain- a protocol that allows all operations such asasset transfer and digital values (money, contracts, securities transactions orIP) to become more secure. If e-commercewebsites do not have an integrated shopping cart system and sales are handled manually,store owners can accept Bitcoin immediately. All that a merchant needs to do isuse their wallet address to accept the currency and place a table “AcceptBitcoin Payments” on the site.
They can then place a QR code on theirwebsite to the customer scanning and start accepting Bitcoin immediately. Thisis probably the simplest way that a merchant can do to accept Bitcoin withoutintegrating a payment gateway. For Bitcoin users, although its way is more complicated thanthe seller, customers do not use it too hard.Having a Bitcoin wallet as a merchant, customers canpurchase Bitcoin by credit card or bank transfer. Simple providing a Bitcoinaddress where their example creation and bitcoin will be routed to for example,then users can use them to buy whatever their want. Next, just go to the online store they want to buy andselect the product they need to buy. Then go to the payment section and chooseto pay by Bitcoin or click on the Bitcoin icon. They will be provided with thesame ordering and price information when switching to Bitcoin with a QR code toscan from their wallet (if they use the wallet installed in phone or tablet).
Opening wallet on mobile device and scan the QR code. The code will turn greenafter 1-2 seconds indicating that the payment has been completed.If they use a desktop wallet, click “Payments” onthe Bitcoin Client. Wallet will be opened for them to verify the correctinformation (Order ID, Bitcoin number, Bitcoin address) and confirm theinformation to make payment. Once the customer has made the payment, the store on the webwill transfer the credit to the seller / shop immediately and only they havethe right to refund. Not only is it a new trend currency, the benefits it bringsto business as well as transactions in the small business. If you are a merchant, there are many benefits to acceptingvirtual money as a payment method.
The first is the processing costs paid bythe buyer and the seller does not need to pay anything to receive money. Thesefees are significantly lower than traditional payment networks. It allows sendingglobal merchandise without currency restrictions. It allows irreversibleone-way transactions.
And since this is the way Bitcoin operates, so merchantsdo not risk being charged. It is becoming more attractive and more likely tobecome an acceptable payment method in the future. There is no subscription feeor monthly fee to use Bitcoin directly, it is different from traditional bankaccounts and payment networks.
Large payments can be made easily without the maximum limiton the size of the payment. Some traditional payment processing networks chargemore for larger transactions or limit transaction size, causing problems whenselling high value items and other large transactions. Equally, there are many benefits to the buyer when usingBitcoin. It allows for quick confirmation within 10 minutes and makesinternational transactions more convenient. It also allows you to purchasegoods from overseas without having to worry about currency issues. Storage ofmoney is not difficult.
Transaction fees are paid by the depositor, but usuallyonly a few cents. This may result in the overall cost of some items being lowerfor the buyer since the seller does not have to pay for large processing feesduring the transaction. Electronic wallet can be used on any electronics likeandroid, apple, pc.
Some wallets can be used on USB. Security of largetransactions between sellers and individual buyers has increased significantlywith multi-signature escrow services. Talking about transaction fees, as you know, at thebeginning, Bitcoins dominate the cryptocurrency market. One of the advantagesof Bitcoin is that it can cross borders with zero or very little transactionfees.
However, Bitcoin fees are no longer available, and Bitcoin fees are evenhigher than PayPal and Western Union. Trading companies are cramping theirbrains using Bitcoin as a currency because fees are cutting their margins. TheBitcoin transaction fee has increased 19 times, from 13 cents for an averagetransaction in the second quarter of 2016 to $ 2.4 the same period this year. Bitcoin transaction fees are rising so that other currenciessuch as Dash and Litecoin can be used more widely. In conclusion, Virtual Currency is an emerging technologythat has the potential to change and improve the trade as we know it. It hasthe advantage for both buyers and sellers, such as no merchant fees, lowtransaction processing fees, cross border work and many technical improvementshave been made.
Virtual Currency is a very good payment system for merchants toaccept it because it is the potential for future digital money and merchantsalmost no loss to accept this payment system.