Millennial Analysis: Bitcoin vs Competitors
Millennials may be the perfect candidates for adopting Bitcoin and promoting it to go mainstream. Growing up in a technological era, the Millennials have become accustom to ever changing innovation, which recently include Bitcoin. However, with multiple alternative digital payment systems, Bitcoin needs to beat the competition to become the benchmark for digital payment.
Also read: Future Use Cases for Blockchain Technology: Proper Decentralized Crowdfunding
This article will act as an infrastructure in comparing Bitcoin to its competition using cost benefit analysis. Among the digital platforms that Bitcoin competes against, this article will analyze the most prevalent among the millennial age group of 18 to 34. For purposes of simplicity, we will not address the platforms’ functionality for person-to-person and person-to-business transactions.
PayPal
Release Date: 1998
Transaction Fee:
Sending Money- Free with a linked bank account; fees apply if using a linked debit or credit card
Receiving Money- Subject to 2.9% plus $0.30 fee
With over 169 million customers worldwide, Paypal has lightly tapped into global exchange. Being the oldest digital exchange, Paypal has established roots in numerous online marketplaces. However, Paypal transactions are not instantaneous; the availability of the payment can be delayed up to 21 days, which is the main downside.
Google Wallet
Release Date: May 26, 2011
Transaction Fee: A 2.9% fee is charged to add money to your wallet using a debit or credit card.
Goggle wallet offers a motley arrange of functions outside peer-to-peer transfer. Similar to Paypal, Google’s trusted name has a fixed market that is compatible with copious online marketplaces. However, Google Wallet is not compatible with Apple products.
Venmo
Release Date: March 20, 2012
Transaction Fee: 3% fee for credit cards and non-major debit cards
Venmo’s interface is simplistic and very easy to use. However convenience is a trade off for financial security. Multiple accounts of security breaches have been reported but Venmo has incorporated a 2 step verification to try to alleviate this problem.
Apple Pay
Release Date: October 20, 2014
Transaction Fee: No charge
Unlike the other companies, Apple does not charge the users, merchants or developers but the credit-card issuing banks. It main downfall lies in its compatibility: only Iphone 6, 6 plus watch-compatible devices, Ipod Air 2 and Ipod Mini 3 are capable of using Apple Pay. These devices, however, have biometric capabilities that Apple Pay utilizes, adding extra security precautions.
SnapCash
Release Date: November 14, 2014
Transaction Fee: None
Snapchat, a popular conversation application that has expanded its function to include digital money transfer.
While this app has a simple interface to send money, its emphasis is built upon messaging not finance. In sending more than $250, Snapcash requires verification of identity and your social security number.
Release Date: March 17, 2015
Transaction Fee: No fee
Analogous to Apple Pay, Facebook friend-to-friend Payments Offers Biometric Touch ID for iOS and programmable PIN for additional security.
Bitcoin has strong competition for the Millenial’s choice of payment. All six of these companies have strong credibility: Bitcoin does not have this convenience. Snapcash has developed as an extension to Snapchat that millions of Millennials use worldwide. On the same token, Facebook, Apple, Google, and Paypal have established a large market for their digital wallets. By branching out from their targeted products or services, they can capitalize on their extensive number of consumers. Venmo was the first of its kind to develop a mobile friend-to-friend digital payment system, capitalizing on the revolutionary simplicity of digital payment and earning itself a respected name among Millennials. The release dates, however, demonstrating the exponential rate that digital wallet applications are emerging, could foreshadow a new development that grabs the attention of Millennials.
Bitcoin wallets are compatible with Android and Apple, along with any web-based application. Alternatively, Apple Pay cannot be used on Android devices, nor with the older versions of iOS; Google Wallet cannot be used on Apple products. The vehicles for the digital wallets can be an inconvenience to an individual if the device and targeted wallet aren’t compatible, and also if the buyer and seller use different companies. These apps require the seller and receiver to have accounts on the same platform; Bitcoin does not have this prerequisite since it’s decentralized.
Any wallet is suitable to send and receive Bitcoin based the the implemented wallet address. Bitcoin is most well known for being a decentralized form of currency (not controlled by one party). This makes Bitcoin applications more secure because the application itself is not in charge of confirming the legitimacy of a transaction. Its reliability is not dependent on one centralized system, but utilizes the blockchain that has revolutionized security in the finance sector. Admittedly, centralized companies, like the ones above, are in charge of deciding the validity of a payment. In other words, digital wallets that record the ledger themselves are adding more risk to information breaches and unauthorized transfers. For this sole reason, Bitcoin wallets have less security vulnerabilities based on the fact that they aren’t responsible for the financial ledger needed to maintain a functional digital wallet.
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While these already-established companies have the market advantage, the transaction fees on the popular Bitcoin exchanges Coinbase and Kraken are well within range of the frees noted above. Coinbase charges .0001 and Kraken charges 0.1% and .26% for Bitcoin transaction, which are competitive with the digital exchange markets.
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As a Millennial, I can attest to the strong information gap that this generation has encountered with Bitcoin. These platforms are an extension from the already-trusted names that Millennials buy and use on a a daily basis. While Bitcoin offers anonymous and privacy protection from companies leaking your financial security, to a Millennial, its investing money in a black box. Without a foot in the door, Bitcoin has struggled to appeal to the millennial generation.
