It is hard to imagine a person in today's internet world who has not heard of cryptocurrencies at least once. At least, everyone has heard that there is money to be made in the Bitcoin sphere. After all, a single Bitcoin can jump in value from a few hundred dollars to several thousand in split seconds.
Why investors invest huge sums of money in crypto, and even more so, why it can be useful to the average consumer, we will tell you below.
Currently, the most popular choice among payment systems is still the traditional centralized systems such as Visa or PayPal. They allow for easy purchasing: simply set up an account with the desired system or bank, and you can pay for anything in almost any local currency. The simplicity of the principle attracts consumers to continue using this particular method of exchanging money for goods or services.
Therefore, as the popularity grew, the idea of combining cryptocurrencies with the bank cards people are used to came about. This is how cryptocurrency debit cards came on stage. The working principle was the same as that of an ordinary debit card. The only caveat was that cryptocurrencies were converted into fiat currencies and vice versa.
The first such card, which could be topped up in Bitcoins, was announced in 2012. Cryptocurrency exchange platform BitInstant and several banks previously working with Mastercard had been preparing to issue the card for about two years. In 2014, the CEO of the cryptocurrency exchange was arrested for money laundering, and the card was never released to the market.
The next attempt was the issuance of prepaid bitcoin cards in 2016. This was spearheaded by the crypto processing company BitPay and a bank working with Visa. Using such a card, holders could top up their cryptocurrency account, withdraw cash (the system automatically converted cryptocurrency into national currency), or pay for something through POS terminals.
But so far, attempts to take cryptocurrencies offline have not been popular with users. Why is that?
Such cards are still unpopular. While Visa and Mastercard have already issued around two billion cards, cryptocurrency cards account for around half a million cardholders.
This is partly due to the small number of companies that operate such cards. The development of the industry is also hampered by the reputational situation of those who do issue cryptocurrencies. Some have attracted dubious investments through ICOs, while others have encountered problems with issuers and the resulting inability of users to make payments.
In addition, there is the need to address the fact that different brands of cards are available in different regions, which are almost inconsistent with each other. So when you come to the US, you will need cards from one manufacturer, while in Europe and Russia, you will need cards from a second and third manufacturer, respectively.
Also, one of the advantages of cryptocurrencies - independence from specific companies and entities - is violated. This is because there is a need to work not only with the crypto processing service itself, which will provide the cryptocurrency storage platform but also with the bank. And the bank, for its part, has the full right to block the transaction or cancel it.
However, this problem is gradually being solved. From 2020, the virtual bank TTM Bank offers users to issue a cryptocurrency card, the use of which does not require registration on any services, even using email. The card is based on the Visa system and can therefore be funded from any personal wallet.
Therefore, the number of users paying with cryptocurrency is constantly growing. As the number of entrepreneurs who sell goods and services in bitcoins, for example, grows, so does the number of people paying in cryptocurrencies.
The world is changing quite rapidly, and cryptocurrency is growing inexorably. The amount of investment in this industry is huge. But why are some users afraid to use cryptocurrencies?
Some of the main problems with cryptocurrency payment systems include the following:
Legal uncertainties and prohibitions. Cryptocurrencies are banned in some countries, such as Egypt or Algeria. But much more often, crypto payment means are not yet legally regulated in many countries. However, a large number of developed countries allow them, and some even enjoy some benefits;
Dependence on the exchange rate of national currencies. Bitcoin, for example, always has to be converted into dollars in order to appreciate its value or buy something. Right now, there are no solutions that allow you to price products in digital currencies. And it is sometimes even more advantageous for businesses to quote prices for providing services in the local currency and leave the conversion fees for converting one currency into another;
Volatility and speculation on exchange rates. Cryptocurrency exchange rates can change rapidly. So rapidly that in just a couple of hours, a coin can lose or gain several tens of percent in value. However, to protect against such spikes, there are services that record the value of the transaction at the time it is made. Therefore, if the price of a currency suddenly changes while the transaction is being processed, it will remain the same for you.
Cryptocurrencies are quite a young technology, but we can already see the vectors of their development and improvement. Perhaps in 10 years time, accepting cryptocurrency payments will become the new normal.
Bitcoin is now held by more than 20 million people. Ether, the next best-known currency, is held by more than 70 million. In addition, the largest companies in the world own their assets in Ethereum.
Why are more and more people and companies buying cryptocurrencies?
Payments can be made from anywhere in the world, 24 hours a day, seven days a week. In some countries, banks are not open on special holidays, and cryptocurrency transactions do not face such a problem. In addition, there are no restrictions on the amounts to be transferred;
There is no need to leave personal information in order to conduct a transaction. In addition, the personal information about the transaction is encrypted, which prevents it from being stolen;
At the same time, the entire transaction process is transparent - all transaction records remain in the system forever. They cannot be falsified or altered;
Any transfer of money is agreed to in advance, and once the terms of the transaction are agreed upon, they cannot be changed. Therefore there is no way for you, as a user, to be charged extra fees "quietly."
This is an incomplete list of common advantages of cryptocurrencies over conventional currencies. And there may not be an urgent need to use crypto payments globally, but in some sectors, such as gaming, the use of cryptocurrencies is much more convenient than conventional currencies.
For now, it is much more profitable to implement online cryptocurrency payments services. For businesses, setting up cryptocurrency payment acceptance will help increase demand for their services. After all, a user can pay for purchases in the most convenient way. In addition, such transactions are not tied to a country, so payments will be much faster than regular international payments.
So what are the benefits of cryptocurrencies from a consumer's perspective?
The system is decentralized, so you and only you decide how, where, to whom, and how much to send. And no one can interfere with the transaction process;
Your personal information is either not required at all for the transaction, or it is securely encrypted;
Minimal fees, which are often several times lower than those offered by traditional payment systems like Visa;
No restrictions or limits on transactions. The US or Canada, for example, limit transaction amounts. Bitcoin users, on the other hand, never care about such restrictions.
We hope you now understand the advantages of crypto payments for online payments. The popularity of cryptocurrency payment is growing inexorably. Who knows, maybe now it's time to get your own cryptocurrency wallet?
