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If you’ve ever ventured outside mainland Europe for a spot of travelling, you may have wondered what it’d be like not to have to worry about different currencies and exchange rates.
It’d be nice if you could keep the same currency all throughout your travels, right?
Not only would you make huge savings on transaction costs, but you’d also not have to worry about getting used to the value of the local currency (which, if you ask me, is one of the biggest pains of frequent country-hopping).
Even better, what if you could travel the world without withdrawing a single penny, or carrying your plastic with you?
Relatively recently, Austin Craig and Beccy Bingham claimed to have done just that, using the increasingly popular Bitcoin currency.
Well, I call bullshit.
I think using Bitcoin to travel is a terrible idea, especially if you plan to go off the beaten track. Here’s why.
But Wait, What Is Bitcoin?
OK, so let me back up a bit.
For the uninitiated, Bitcoin is a digital currency that’s created and held electronically.
Traditional currencies, such as the Dollar and the Euro, are created by governments and regulated by authorities that determine their value based on economic principles.
Bitcoin isn’t. Instead, it’s created by computers solving complex mathematical problems in a process called mining, but most people won’t get theirs that way. Mining is a complex process, and you need special hardware and software to do it. Instead, Bitcoin is typically bought from dedicated exchanges, like this and this.
Sounds Like It Could Work For Travellers, Though, Doesn’t It?
Let’s be clear here, Bitcoin has some great advantages for travellers.
Firstly, you’re sticking to one currency. No more unfavourable exchange rates, obscenely high ATM withdrawal fees and tenuous grasp of currency value.
Also, because Bitcoin is completely digital, there’s no more fiddling around with unfamiliar coins and notes.
Sounds good, right? Well, there’s more.
Unlike other currencies, Bitcoin is completely decentralised. It’s not owned and controlled by some big institution. Fees and charges are low to nonexistent; and transfers are instant, wherever you are in the world (high speed Internet connection not included). What’s not to love?
Well, a lot. Here goes.
Bitcoin Is A Highly Volatile Currency
In the simplest of terms, the value of Bitcoin can be sky-high one second, and a pittance the next.
Just one look at the graph on the Bitcoin Volatility Index and you’d be excused to think you’re looking at the design for a crazy roller coaster rather than a financial chart.
On average, the value of most major currencies fluctuates about 0.5 to 1%. On the other hand, at the time of writing, Bitcoin’s rate of fluctuation for the next 60 days is estimated at 1.32%.
This may not sound like too much, but you’d be surprised at the difference it makes when you do the math. Besides, it’s just the current estimate — look at the graph more closely, and you’ll see the fluctuation rate has reached eye-watering levels in the past. At one point, it peaked at almost 15%!
There are various reasons for this, which I’m not going to go into because they’re beyond the scope of this piece. If you’re travelling, though, the problem is self-evident.
You’ve bought £2,000 worth of Bitcoin to tide you over for the next two to three months.A few weeks later, you suddenly only have around £1,700 worth. Another few weeks and – lo and behold – you’re down to £1,000. All without even spending a penny.
Not good, is it?
Now don’t get me wrong. It is possible to use volatility to your advantage. Trading in Bitcoin is a thing, and there’s really good money to be made by those who know what they’re doing.
But in order to make this happen, you’ll have to be constantly on your toes, monitoring market fluctuations and doing whatever other mysterious stuff it is stockbrokers do all day. That excursion to Angkor Wat isn’t happening any time soon if you’re stuck to your laptop making trades.
It’s Completely Digital
I know, I know. I did call this an advantage just a few paragraphs ago.
At the same time, though, it’s also a disadvantage, because making digital payments successfully is highly-dependent on the infrastructure of the country you’re visiting. And, let’s be real, paying electronically can be a pain in the proverbial backside even in major first-world cities.
Cash-only bar in central London? Check. Ditto in Stockholm, Rome and even – shock, horror – midtown Manhattan.
Now imagine a tiny village in the mountains of Nepal. I rest my case.
Getting your hands on some printed Bitcoin is quite possible, but it isn’t what you’d call a straightforward process. You’re going to need to print it yourself and take all sorts of precautionary measures to keep it safe and dry.
Also, it begs the question: how are vendors whose understanding of Bitcoin is questionable at best going to make the currency conversion?
Heck, how are they even going to give you change?
There’s also an added complication:
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Not Everyone Accepts Bitcoin
While Bitcoin is becoming more popular, it’s still a relatively new currency, and not everyone accepts it.
By their own admission, Austin Craig and Beccy Bingham went hungry because they had trouble finding someone who’d accept payment in Bitcoin. And this was in Stockholm, the capital city of one of the most advanced nations in Europe.
If it was a problem there, I seriously doubt you’ll convince someone with limited access to technology (and who may barely speak your language) to accept a currency which not only have they probably never heard of, but which isn’t even paper money.
Don’t expect to be able to easily turn it into local currency, either. There are only a tiny number of Bitcoin ATMs in the world, mostly in North America, and vendors seem to shut down at least as often as they start up.
You’re At The Mercy Of Your Electronic Gadgets
Bitcoin lives in the so-called blockchain, which is sort of its virtual environment.
In order to claim it as your own, you’ll need to link the Bitcoin in the blockchain to an electronic wallet. This holds the private keys you need to access the virtual address where your Bitcoin is stored.
If your wallet file gets corrupted, or your device dies before you save your wallet file, your Bitcoins will essentially get ‘orphaned’. They’ll still be in the system, but you won’t be able to claim them back as your own.
As long as you have a somewhat-recent backup (you’re making those, right?), a corrupted wallet file shouldn’t be a long-term problem, but it’s definitely going to be an issue for while.
That said, there’s also another concern – hacking. It’s something to worry about whenever it comes to personal information stored on electronic equipment, but the problem with Bitcoin specifically is that there are no banks or other authorities you can get in touch with for refunds or to address any other issues.
Much like losing your physical wallet, playing fast and loose with your online security can leave you out of money and out of luck.
That bulky pile of Guaranis suddenly seems a better idea than Bitcoin, doesn’t it?
What are your thoughts on using Bitcoin to travel? Sound off in the comments below.
Main image via BTC Keychain