Do you feel that bitcoin is a great opportunity and you are simply missing it? Could travel with bitcoins but not sure what to do? Unsure if it’s time to capitalize on your gains and travel with bitcoins? Are you feeling you are ready to take a leap of faith and start investing? Or do you think your company is ready to embrace bitcoin as part of their day-to-day travel operations?
You will see in this blog that there are several options to travel with bitcoins. There are few travel agencies, airlines, and hotels that allow paying for your trip with bitcoin. Opportunities for investments are also available if you want to save for retirement and travel the world.
There are a few reasons why you could be thinking about utilizing bitcoin to pay for travel. Let me show you how.
Why should I think about travel with bitcoins?
You might are thinking: What is it going to happen if all travel companies start using bitcoin? Additionally, imagine your neighbor sharing their travel pics on a yacht in Bora Bora on your next kid’s birthday party paid with bitcoins?
Or on the other hand, what if these cryptocurrencies are only creating a bubble that is ready to burst?
Here you will find out if bitcoin can an option for your next travel plans. Furthermore, you will see that some companies are already trading in bitcoin. But are they on the right track?
However, before we understand bitcoin or cryptocurrency, let’s talk about money.
Will the future allow us to travel with bitcoins? Let’s look at the past first.
Money is value.
In the past, we associated value with physical goods and they have taken many forms: shells, wheat, gold, salt, etc. Notably, the word “salary” comes from payments in salt. You know that, right?
For something to have value, and work as a means of exchange, we need to trust it. Hence, for centuries, we have associated the value of money with physical goods. Moreover, we had to start trusting them to facilitate trade.
In recent years, we changed our model from trusting something into trusting someone. First, we started using PAPER BILLS instead of materials to pay for things. Imagine paying for your ticket using pieces of gold bars from your oversized wallet.
Then, governments decided they were going to be responsible for the value of those paper bills. With that in mind, you didn’t need to have actual gold to possess value. Consequently, it was the end of the GOLD STANDARD. Check NIXON’S ANNOUNCEMENT in 1971.
Are we cool so far?
For this reason, people started trading things using paper money purely based on trust.
And that’s how “fiat” money was created. Fiat means “by decree” in Latin. That is to say that the value of the money now comes from the status that central authority attributes to.
Now, let’s get to the fun part.
What is the difference between Fiat Money and Bitcoin?
Fiat money has different characteristics compared to bitcoin or other cryptocurrencies.
It is centralized and only governments or central banks can issue money. But these authorities can print as much money as they need.
However, printing more money causes its value to drop. For example, when hotel prices go up, it is not because more value was attributed to it. Actually, it is because you can buy fewer things with the same amount of cash.
In that case, you may have heard about hyperinflation in Germany in the 1920s. Maybe you also heard most recently about Venezuela. As a matter of fact, people had to start paying for things by weighing money because of the little value each bill had.
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But with the advent of the internet and technology capabilities, fiat money became more digital.
So, what would stop me from creating a copy of my own money? Literally, printing my own money?This is the double-spending problem. In other words, it is the risk of digital currency, like bitcoin, being spent twice.
With this in mind, banks solved that issue with sophisticated ledger systems to track money. Then, they assigned each person an account number to store their money. However, that information is centralized and only found on the bank’s server.
But, when a single authority centralizes the money, much power is concentrated. Moreover, you give away control of your money. That combination sometimes leads to corruption… Only sometimes, you know?
When was the bitcoin created?
In 2008, Satoshi Nakamoto published a white paper about a revolutionary way to transact good and services. It claimed that a new form of decentralized digital currency would solve the double-spend problem. A PEER-TO-PEER ELECTRONIC CASH SYSTEM. That is to say: The Bitcoin.
And how would this work?
This system would operate on a public ledger. There, anyone could check the current state of balances and transactions. Nonetheless, the system is decentralized as everyone would keep a copy of the ledger on their own computers.
That is the difference from the banks. You can’t really access the banks’ ledger to understand how much money is in it. But similarly to banks, you won’t know who made these bitcoin transactions and their values. That way you could still protect one’s privacy.
You get a copy! You get a copy! Everybody gets a copy! (Can you hear OPRAH too?)
So, whenever new transactions are generated, the ledger creates a new “block” with that new information. Consequently, that new information is added to a chain of blocks; also known as the “Blockchain”.
So, each new block is created approximately every 10 minutes. And after a new block is created and added to the chain, the whole chain is therefore updated. Once updated, they are shared across the network of computers.
As a result, someone would have a small window to hack the ledgers in every computer to fraud them. And that would have to be done at the same time. Consequently, defrauding the cryptocurrency blockchains is nearly impossible because the chain grows at each update.
Seems good, uh? Hmmm not quite there yet….
The controversy: Bitcoin or Fiat Money
So, is cryptocurrency an option for fiat money?
There are some characteristics we need to highlight first:
Firstly, with bitcoin or any other cryptocurrency, you control your own money. There is no intermediary between payer and payee. Therefore, no bank or government can freeze your account or block or funds.
Secondly, it cuts down the number of middlemen. Each transaction is more economical and it is easier to send and receive funds in some cases.
Then, it opens digital commerce opportunities to people who don’t have bank accounts but do have access to the internet. According to Forbes and the World Bank, in 2017 over 1.7 Billion people lacked access to a bank account and could be transacting in bitcoins.
There will be a limited number of bitcoins issued and they are about 21 million.
Some specialists talk about bitcoin’s “deflationary” nature, which means people would be better holding currency rather than spending it.
Fiat money loses value over time and people need to make it circulate to create more value. Contrarily, the deflationary nature of a currency could impact wealth creation. Another fact is that many bitcoins have already been lost because people may have lost access to their accounts, making the number of bitcoins more finite.
You also want to consider the fact that cryptocurrencies have been “re-centralized”, where 3rd party exchangers have entered the marketplace causing security and fee concerns about the freedom of bitcoin, for example.
There is still a lot of debate about bitcoin and other cryptocurrencies. Please watch the opinions of Bill Gates and Warren Buffett talking about what they think about the topic.
Cryptocurrency: Can you travel with Bitcoin?
Over the past months, we have seen a surge in the price of cryptocurrencies attributed to these facts:
Institutional investments – Corporations like Paypal and Square are buying bitcoins like never before. In addition, private investors are following suit. Consequently, this scenario creates waves of trust, which are deemed necessary for a currency to succeed. Remember…? Trust?
More people buying – More people have access to the stock market as the result of new Fintech companies entering the market.
Central Banks are now invested in developing digital currencies because they are scared of losing control of money as other cryptocurrencies are growing: Ethereum, Neo, Cardano, etc. In the same vein, we may see new currencies being registered this year.
Not to mention that big corporations are yet to enter this market too. And have you heard about Libra from Facebook? Now called Diem?
But for digital currencies to be widely adopted, they need to be available for retail transactions. Consequently, an overall adoption would need to take place to ensure the cryptocurrencies can circulate. For example, you receive bitcoins as salary to spend on hotel bookings, taxi rides, visa applications, etc.
How can you pay for travel with Bitcoin at the moment?
In 2014, EXPEDIA STARTED ACCEPTING BITCOINS as a payment option for hotel bookings. The idea was to give customers a choice, according to the company.
And why has it STOPPED ACCEPTING IT IN 2018?
Firstly, it seems they were treating it as an EXPERIMENT due to its price volatility. Above all, their perception was that customers could lose money overnight if they decided to spend it on tickets. Remember the deflationary effect?
At that time, there were few places accepting bitcoin, making transaction fees expensive. Moreover, the lack of commercial adoption would make bitcoin circulation a challenge. Nevertheless, bitcoin had been treated as a speculative investment, making it harder for the general public to use cryptocurrency in general.
Maybe it is still the case? Though recently, Expedia has partnered with TRAVALA allowing over 700,000 hotels to be paid with cryptocurrency but has it missed an opportunity?
Which airlines allow you to pay for travel with Bitcoin?
Interestingly, Air Baltic, the flag carrier of Latvia, accepts 4 types of different cryptocurrencies, being Bitcoin one of them. At the time of publication of the blog, the carrier is the only air transportation company that receives cryptocurrency as a direct form of payment.
Air Baltic flies to 1 domestic and 69 international destinations across the Baltics, Europe, Russia, Caucasus, Middle East, and Central Asia. airBaltic also serves multiple charter flights. You can check below some of the options to fly with the airline and utilize your bitcoins to pay for travel.
Which hotels allow you to pay for travel with Bitcoin?
As the industry evolves and technology adoption is improved we will tend to see more properties accepting Bitcoin. Specially with the surge in price we’ve seen recently. As you can see below, there are just a handful of hotels in the Luxury sector that accept bitcoin as a direct form of payment:
Dolder Grand in Zurich – Switzerland
Sandman Hotels in Canada and global
Casual Hoteles in Spain and Portugal
The payment options are always at the hotel discretion and they can change at anything. But it’s always worth it to check them first.
If you travel for business, does that mean that your company can start thinking about cryptocurrencies as a payment option for your travel? And for you? Do you want to spend part of your reserves on your next trip?
In conclusion, I am unsure how early cryptocurrency will be widely available to the public for everyday transactions. At the moment, there is a lot of speculation around these new means of transactions and it is still a bit volatile.
With that in mind, it will be interesting to watch the attempt of governments to establish new CDBCs and rollout to society. But will they be formed under the same characteristics of the current banking systems? We need to wait and see.
If you hold cryptocurrency now and want to pay for trips, could it be a good option? Paying fewer bitcoins which are high in value for tickets and hotels that a very cheap in price at the minute could be a good opportunity?
Moreover, would corporates use strategies cut costs in the long term, taking advantage of price volatility? Will it be possible to use cryptocurrency in any travel transaction?
There are so many aspects to consider. If you want to learn more about cryptocurrency, these are some resources you can use:
- Bitcoin, Blockchain and Cryptocurrency Courses
- Crypto Ultimatum Book Course
- Beginner’s guide to Bitcoin
- The Bitcoin Standard: The Decentralized Alternative to Central Banking
If you are ready to invest, here’s a platform to help you with that:
Disclaimer: I’m not a financial advisor and you should consider professional assistance to start investing.