There is no denying that cryptocurrencies have had a huge impact on the world. It upends businesses, changes consumer behavior, and causes many organizations to reconsider their strategy as they look for new ways to attract customers. Many companies put their cash reserves into cryptocurrencies during the pandemic because they assumed that currencies like Bitcoin were a safe bet amid the economic turmoil.
However, with the development and maturity of cryptocurrency, there are still significant restrictions preventing its widespread use. Cryptocurrency payments are still not an option for most businesses, but crypto and blockchain startups globally are working hard to change that.
What exactly is cryptocurrency?
A cryptocurrency is a digital or virtual currency that is secured by cryptography. Due to its intrinsic security-focused design, it is impossible to counterfeit cryptocurrency. The organic nature of Bitcoin is its distinguishing and perhaps most attractive feature – it is not issued by any central authority, which makes it impervious to government interference or manipulation.
What exactly is a blockchain?
Blockchain technology supports Bitcoin and many other cryptocurrencies, but it also has additional applications. On a blockchain, information is stored in fragments or “blocks” that are linked to previous blocks, to form subsequent chains. Each block provides information about the transaction as well as a link to the next block. Blockchain can verify the authenticity, legality, and history of transactions. However, it is not an “on/off” switch. Blockchain transactions continue to be encrypted and retained on every node or computer.
What are the benefits of accepting cryptocurrency payments?
The cryptocurrency environment has a number of advantages over traditional financial systems, including the following:
1) It is decentralized, because it is not owned by a single individual or government – it is the democratization of money management.
2) Transactions are confirmed and added to the blockchain in minutes, eliminating the need for third-party intermediaries.
3) Safe, because it is a shared database that cannot be updated unless the majority of users agree. It is also fraud-resistant because users can only store, access, and protect data from organizations that have the necessary credentials.
4) Economical, especially for cross-border payments, because it significantly reduces banking expenses due to all transactions that occur digitally and quickly.
However, companies considering receiving cryptocurrency payments should be aware that the digital currency is subject to extreme volatility and price changes, which, while attractive to traders, adds a degree of uncertainty for businesses. The Financial Conduct Authority (FCA) also issued a statement on the matter earlier this year, warning businesses and consumers alike about the risks of this new type of currency.
How can you use cryptocurrency payments in your business?
If your company wants to accept crypto and blockchain payments, you should use a cryptocurrency payment platform to reduce execution risks and facilitate transactions in the most popular cryptocurrency payments, such as Bitcoin, Ethereum, Litecoins, and Stellar Lumens.
A ready-made payments infrastructure would allow for a simple and transparent application procedure for the merchant, allowing quick acceptance decisions for high-risk businesses. It can provide unique insights to customers in this new area as well as provide the basics for implementing simple payments, such as Bitcoin wallets.
Cryptocurrency payments have the potential to create a borderless and more globalized economy while combating financial inequality by providing fast and secure financial services to people who do not have access to a bank. This is a big win for both online and offline payments.