As payment systems become more centralized, Bitcoin will become a solution for global travelers

The Bitcoin distributed decentralized platform continues to gain attention from observers of centralized payment systems. In today's global economy, one benefit Bitcoin offers is its existence as a global currency. In yesterday's Chicago Tribune, Bret Swanson claimed that Bitcoin could reduce the problems that international travelers often encounter when making payments abroad.

Bret Swanson, president of tech economics research firm Entropy Economics and venture capital firm Entropy Capital, relates his recent difficulties to Bitcoin when his teenage daughter needed to pay for purchases during a trip to France. A few days before leaving for France, he loaded up prepaid Visa and American Express cards, only to realize when reading the fine print that they might not work in all countries. Because he waited some time, he only had a few days left, not enough time to get a bank-issued debit card. Fortunately, he was able to transfer the money to a friend's debit card for his daughter to use. But a week after she started using the card, an ATM in Paris "swallowed" the debit card.

Personal experience highlights a growing problem

“This little story shows that the global system of money and payments has not caught up to the frictionless digital economy,” Swanson explained. He sees banks’ efforts to reduce payment card fraud and comply with anti-money laundering laws as a sign of the complex payments landscape for ordinary people in the future.

He observed that Bitcoin offers a solution. Bitcoin is not dependent on payment card networks, banks, and government monetary authorities. For these reasons, Bitcoin has become an important remittance platform in developing countries.

Swanson acknowledged that Bitcoin has some limitations: It is not yet accepted by many merchants, and it is not "frictionless in how it interacts with the rest of the economy." Bitcoin's price volatility is also an issue, although many believe that will become less of an issue over time.

Bitcoin highlights current financial issues

“Regardless, Bitcoin (and blockchain technology more generally) has solved some fundamental problems in a world of fragmented, complex information. And it has highlighted some of the unnecessary and frustrating difficulties of our current monetary and financial platforms.”

As a decentralized platform for distributed trust, Bitcoin has the potential to alleviate many of these headaches in our more centralized payment system, which is based on banks, payment networks, and national laws and regulations.