Basic explanation of what is different between credit card and cryptocurrency payments?
Bitcoin vs. Credit Card: An Overview
So, like most people, you have a credit card to pay for things. But unlike most, you also have some bitcoin at your disposal. Which one should you use, and when, to maximize your assets?
Satoshi Nakamoto, the inventor of bitcoin, titled his original white paper on the subject "A Peer-to-Peer Electronic Cash System." This description touches on the core differences between bitcoin and credit card transactions.
Bitcoin payments are analogous to wire transfers or cash transactions, where payment is "pushed" directly from one party to another, without going through another financial institution. Payment processing is executed through a private network of computers, and each transaction is recorded in a blockchain, which is public. Bitcoin is based on peer-to-peer technology and relies on the blockchain and the cryptography securing it, without any third-party oversight.
By contrast, credit card transactions entail the buyer effectively authorizing the seller to "pull" a payment from their account, passing through financial intermediaries in the process. For example, a typical Visa transaction involves four parties: the merchant, the acquirer (the financial institution that enables payments to the merchant), the issuer (the card holder's bank), and the individual cardholder.
When making a bitcoin transaction, it is not necessary to provide personal identification, such as your name and address.