The future of cryptocurrencies being utilized as a payment method is a much talked about debate. It is not an unknown fact that cryptocurrency is highly unpredictable but has numerous advantages as well. However, using them as a payment method and for money transferring has caught many people’s attention. Hundreds of concepts about crypto payments are being discussed constantly. With the help of thorough research, this concept can be debunked.
As of now, utilizing cryptocurrency as a payment method has not fully taken off, but there are still many businesses, large and small scale, who are thinking about hopping on the crypto bandwagon and inculcating blockchain technology into their systems. Many companies have already started to accept or used to accept, crypto as their transaction method which includes companies like Microsoft, Virgin, Expedia, Subway, T-Mobile Poland, OkCupid, and Newegg.
Many organizations are hesitant to finally accept crypto as a form of payment method due to its vague regulations, this has been stated by the US-American Office of the Director of National Intelligence states. Another reason why this problem might be caused is because of the threat of money laundering through Bitcoin. But this is not final yet as there is still hope for its mass adoption with changes being made to better trace illicit actors.
How do cryptocurrency payments work?
Online stores are always in search of new and better ways to aloe their customers for payments, but at the same time not cause any increment for frauds or scammers. However, it can be proven that businesses can prevent fraud by accepting crypto. The customers will have to make the payment upfront in the form of a one-way transaction, this way sellers will not encounter canceled transactions when they have already prepared the product for delivery. On top of this, the
transaction fees will be decided by the user, and there will be no involvement of banks or cards. Taking an example of Bitcoin, the more fees paid result in faster delivery of the money.
Certainly, paying for a cup of coffee or merely a pair of socks will not be the most suitable option through crypto. The reason behind this issue is because every Bitcoin transaction is competing for its verification by the miners, who usually cater to bigger transactions first as they yield a larger fee. Ultimately this means that a smaller transaction will take longer to get processed. The question is can this problem get solved?
Cryptocurrency can be utilized in a couple of ways in one’s mundane life. Typically, what would happen is that the user might go to a third entity, for example, any reliable cryptocurrency exchange. The purpose of this is that it will hold every user’s coin on their behalf. Hence, organizations and customers who are registered to the same third party can allow their users to make payments without any fees or prolongation. Although numerous companies have started to use crypto as a substitute for the traditional method, they refrain from using it for everyday tasks just yet. Traditional methods are working just fine as of now, and crypto will need to make its transaction method more effective to be used in the daily lives of people.
The pros and cons of cryptocurrency as a payment method
The issues around crypto payments may get solved when the legislation has fully been enacted, people making their payments through crypto will have their information fully confidential. Companies and customers who prioritize privacy and anonymity will surely see this feature as a pro. Although Bitcoin has partially made an image of being a bridge to perform illegal activities, it is still a legit and perfect method to operate payments. This is best for those buyers who are very cautious about cybersecurity and will prefer this alternative to the traditional one.
Hence, this privacy and anonymity can go both ways. It entirely depends upon what the business entails. The next notable feature of cryptocurrency is its extremely volatile nature. There is always a very high opportunity for the market value to reach a high, but at the same time, it can also decrease in a matter of hours, meaning that in the case where a user sold a product for 500 Euros, there is a chance that those 500 Euros might not be in the account the next day. Sellers can go around this problem through the conversion of revenue into legal tender as soon as the transaction took place. On the contrary, if a user bought cryptocurrency simultaneously when their wallet is loaded, the user will also be making a profit with an increment of value of one’s assets.
Many organizations that accept bitcoin payments often do that for investment or trading purposes. They hold their crypto assets and wait for the market volatility to have its impact on them. Even though it carries a significant amount of risk of loss, it is a profitable technique for many. Moreover, many individuals also practice crypto trading and investing through reliable platforms, like the Bitiq software. They hold their transactions and often trade different crypto pairs with the assistance of these platforms. This concept is gaining sheer popularity among the consumer sectors.