Bitcoin Evolution: How Risk Assessments Models Will Improve Costs of Transactions in 2021
The risk management model has to do with analyzing, identifying, and giving feedback to the certainty of a project. It is broken into processes and subprocesses, the major ones include risk identification, qualitative risk analysis, risk response planning, quantitative risk assessment, and risk monitoring and control. It is therefore needful to state that risk assessment models exist amidst vulnerability, and the bitcoin market ranks on the list because of its volatility, hence, a subject of this model. But there are not many organizations will be doing in a case of emanating problems because the credibility in bitcoin technology is enough to manage whatever challenges that might have emerged.
To understand how the emergence of bitcoin has improved the cost of transactions, you must also understand its advantages and disadvantages in the global financial system – its impact on the global community. The relevance is very visible in most developing countries, where traditional bank transactions leave a hole in the pockets of their customers. But since the technology that drives bitcoin is so decentralized, transaction costs amount to little or nothing.
Table of Contents
How Risk Assessments Models has Improved Costs of Transactions
1. Bitcoin Transactions Has Become Pseudonymous
Although this is bitcoin’s original programming, the presence of the right risk assessment model allows the process to run smoothly without hitches. The Pseudonymous characteristics of bitcoin imply that the identity of the people running the transactions remain anonymous, a situation that has raised missed feeling among the government and the people. This goes against every traditional norm of online transactions, where sensitive information about the user is detailed before they can move to the next stage. This can easily be seen in an online shop, online course purchases, etc. This is so unlike the bitcoin payment method where all you need is the receiver’s payment address or wallet key which comprises numbers and letters. There are two ways to these characteristics, thus, the need for a risk management model.
2. Transactions on Bitcoin Channel are Free
While bitcoin is also seen to have the same value as fiat currency, it is free of exchange costs, a.k.a.“taker and maker” fees. Bitcoin users are completely free of these fees in the traditional banking system, even as their transactions are of the same value as their counterparts who deal with fiat. With the presence of a good risk assessment model in this process, there won’t be room for overdraft charges, returned deposit fees, or it’s equivalent.
3. Convenient for International Payments
Using this service on your location bank account will leave you in some kind of “stop and search” situation while on an international transaction. The same cannot be said should the transaction be done with bitcoin. You won’t have any interference with the government, which is always getting involved with matters of huge financial movement. Again, with the involvement of risk assessment models, monies will not only be moved without any form of interference but speed will also be applied unlike what you have if you are using your traditional banking system.
4. Mobility
Bitcoin transactions are mobile, this is unlike what you see on a traditional banking system where one will have to deposit a large sum of money at a particular bank before they can go online with it. Involving the risk assessment model introduces a working guideline where users can perform their transactions from any location with Internet access and no form of deposit fees.
5. Tight Security Apparatus
Every valuable item, tangible or none tangible, deserves a well-secured process to remain safe, and the bitcoin system is one of them. Bitcoin runs on the most secured security apparatus called the blockchain, which has also been said to be unhackable. And funny enough, there is no form of transaction fees to make up for all these security features, unlike the traditional banks that will not mind charging you back-to-back for such incredible security.
Conclusion
Finally, as bitcoin transactions continue to serve users without charges, or third-party intermediaries, it is no surprise why there has been a huge adaptation of this system by all and sundry in the global financial system. You have to also note that in a case of a bitcoin transaction where a well-developed project management system may have an organizational method of approaching any challenge that may emanate from it, transparency is required. And when things happen to go wrong, (which possibility of it happening is very low), a good risk assessment model must be applied.