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The primary use case of Bitcoin is the ability to send value cross border. In this article a deep dive into this very rich feature.
Although Bitcoin (BTC) is an already established cryptocurrency in the market, many critics and experts have claimed that it does not have an existing use case. However, it has been proved that Bitcoin can be used not only for processing payments but also to make cross border transactions.
Costly Cross Border Payments
Nowadays, making a cross-border transaction tends to be certainly expensive and complicated to do. While technology has advanced in the last years, it remains very expensive to send and receive funds between countries.
Some of the companies that are currently working on this industry include PayPal, Western Union and MoneyGram. Although their services are very useful, they are far from being affordable for many users. Those individuals that need to send remittances to their home countries may encounter difficulties or high fees.
The current financial infrastructure
However, the real problem is related to the infrastructure used to send and receive these transfers. For example, companies that want to send cash transfers from one country to another. Additionally, by doing this they have to exchange currencies which may not be liquid in many cases.
This is why these firms generally have bank accounts in the countries in which they operate. As a result, they can fund their accounts with the local currency of the country. While the transaction may take several days to be processed, the user would receive the funds almost immediately but for a high cost and fees.

Also, fees for MoneyGram and WesternUnion are costly and start from $5 per single transaction. Furthermore, there is PayPal which has variable transfer fees according to the transaction that the user processes.
MoneyGram, Western Union and Paypal
At the same time, users need to know that there are going to be exchange rates. Meaning, if the currencies are different an exchange rate is charged which can be very expensive in many cases. For MoneyGram and WesternUnion these exchange rates start close to 5% or 6% above the mid-market rate. Meanwhile, PayPal has mid-market rates and a 2.5% margin.
While MoneyGram and WesternUnion transfers can take a few minutes to be processed in some cases, it can take up to 4 to 5 business days. PayPal is faster, it can take just 1 or 2 business days.
With Bitcoin, transactions can become extremely cheap and fast for their users. Also, expensive third parties aren’t involved in the whole transaction process.
Bitcoin’s Main Use Case
As mentioned before, Bitcoin has been labelled as a currency that can only be used by investors to speculate about its price. However, this is not the case. Bitcoin has many different use cases and, perhaps, the most important one is related to the ability it has to reduce costs in the cross-border payment market.

Bitcoin is powered by blockchain technology, which works as a large ledger for all the transactions on the network. Thanks to it, it is possible to send fast and cheap transactions around the world. Besides, it helps users by sending money to their families. Moreover, these users normally cannot afford the long transfers or high fees.
With Bitcoin, it is possible to send large or small amounts of money to different users in just a few minutes. The transaction must be approved by the miners and broadcasted by the nodes throughout the whole network. This process can take between a few minutes and some hours. Most of the times, the transactions get processed in 10 minutes.
In addition to it, the fees for a transaction of a few hundred or thousands of dollars can be just a few cents. Larger transactions (over $1 million) can have a transfer fee of a few dozen dollars. In other words, sending value(money) cross border in a very cheap transaction is the primary use case of Bitcoin!
Sending large amounts of Bitcoin cross border instantly
For example, the cryptocurrency Twitter account Whale Alert reported that a 10,000 BTC transaction (worth $72.21 million on December 30) was processed for a fee of $25 dollars. Furthermore, this is very useful for large companies. Meaning they pay a few percentage points of fees on their international transfers.
The funds will be processed considering that there are no centralized authorities controlling each of the transactions taking place on the network. This is specifically useful for individuals in oppressive countries. Moreover, they do not have the possibility of owning a bank account or one that are surveilled at all times.
Bitcoin can also be embraced by other financial institutions that work with pre-funded accounts in other jurisdictions and that use them to make fast transactions for clients. This is very expensive for firms because they must keep large sums of money stopped while they could be using it on other investments or solutions.
With Bitcoin, this problem gets solved. The cryptocurrency can be used between exchanges without the need to have large sums of money in each jurisdiction in which the firm operates. The liquidity is provided by the market in each of these countries, allowing costs to massively go down and transactions to take place in just a few minutes.
Final Thoughts
What actual problem does Bitcoin solve is a very common question asked by interested investors and business owners. In this article, we have tried to explain the primary use case of Bitcoin which is offering cheap cross border payments. As a result, financial institutions could benefit from this by sending large amounts of value cross border. Also, people in the third world can benefit from it who are currently using expensive services like Moneygram and Western Union.
Furthermore, Bitcoin adoption rate is moving slow but the trend is definitely moving upwards and will continue to grow into the next era. Currently, most investors and business owners are watching this very young asset evolve waiting for the best opportunity. Also, the world is turning global with billions of new people acquiring internet access for the first time in the years to come. As a result, the need for cheap cross border transactions will continue to rise.
Bitcoin has a very strong use case by offering cross border payments fast and against near-zero fees. Currently, the total cryptocurrency market is in the accumulation phase, but developments in this area are moving fast. As a result, buying Bitcoin at these levels or starting a blockchain business is still one of the best opportunities for 2024 and beyond.
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Jelmer Steenhuis
Online entrepreneur at uDigitize
Crypto believer and 'Hodler' of Bitcoin since the early days. Spreading the word about this exciting new technology..
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