Bitcoin (or cryptocurrencies in general) offers some advantages over traditional electronic means of payments such as credit or debit cards, but it faces challenges old and new. It is more than just a new thing that appeals to tech-savy millennials. It also provides anonymity of transactions and, at least from the sellers’ point of view, reduces intermediary costs and fees. In short, Bitcoin is cheap and easy to use — presenting a win-win situation for buyers and sellers.
A major challenge of Bitcoin, however, is that it is not as widely accepted as a means of exchange as the major currencies (e.g., the dollar, the euro, or the British pound). As a matter of fact, many merchants that accept bitcoins as a form of payment actually receive a major currency. What the merchants do behind the scenes is to take the bitcoins and immediately exchange them for a major currency on an online exchange market.