With Bitcoin hitting $1 trillion in market value and cryptocurrencies’ potential to disrupt the global financial system, it is not news that crypto is everywhere nowadays. Digital coins are increasingly held as investments, and early investors in Bitcoin have made fortunes. Some consider cryptocurrencies and crypto payments a democratizing force that puts up a fight against central banks, Wall Street, and governments. There are bitcoin ATMs, digital art piece auctions, crypto-only dealership platforms for cars, and much more.
Nevertheless, knowledge about blockchain, cryptocurrencies, and how it all works isn’t mainstream yet. It is, however, obvious that the blockchain, cryptocurrencies, and crypto payments are changing and challenging the world we live in. Shifting toward decentralized banking is the talk of the town. Already, crypto has been adopted as legal tender in El Salvador. Some governments are embracing cryptocurrencies. Central banks worldwide, including the U.S. Federal Reserve, are considering introducing their own digital currencies. There is talk of Bitcoin becoming a medium of exchange in Afghanistan. The New York Stock Exchange even offers an exchange-traded fund tied to the cryptocurrency. So, it is safe to assume that cryptocurrencies and related services, such as crypto payments are already changing the world as we know it.
The main attraction of any crypto payment is that blockchain is a truly innovative technology that enables transactions only using digital identities, which means you no longer need a national central bank or a trusted intermediary such as a commercial bank or credit card provider. All transaction information and digital account balances are recorded on public digital ledgers, visible to anyone with internet access, maintained by multiple computers across the network. In other words, blockchain means secure, transparent, and tamper-proof transactions. Crypto payments have a lot of advantages for ordinary users. All parties are equal, and the fees are substantially lower in comparison to the traditional payments systems, especially when it comes to large sums.
Crypto payments were initially conceived as a democratic and open type of payment, providing an alternative for centralized financial systems. This is not a simple process, but global leaders are showing an increasing interest in crypto, though continuing to be cautious. Tech giants, such as Amazon, Google, Microsoft, and PayPal, are also joining the game. Amazon is planning to accept bitcoin for payments; Google Pay users can now make payments using cryptocurrencies; Microsoft also accepts digital coins; PayPal clients from the U.S. can use cryptocurrencies for their payments; Mastercard announced its plans to support some of the cryptocurrencies in its network. So, there’s progress in this regard, and it is undoubtedly obvious that blockchain technology is the driver of significant change around the world.
However, there might be some confusion in understanding how the volatile crypto market with hundreds of cryptocurrencies for sale on the exchange work. Indeed, blockchain isn’t perfect and has its flaws, but the technology is maturing, offering new cryptocurrencies that could be the game-changer in the low-cost digital payments world, making them widely accessible. It will give many low-income families with no credit card or bank account access to digital payments. Moreover, new possibilities offered by crypto payments internationally could make money transfers cheaper, quicker, and easier to track. Everybody will profit from these changes, including consumers, businesses, as well as exporters and importers.
Why Cryptocurrency Payments Are The Future
According to some forecasts, the scope of trans-border cryptocurrency payments will increase by 25 times within the next three years, reaching $4.4 trillion in 2024. Many will feel that cryptocurrencies are the catalyst for the newest payment revolution.
However, before cryptocurrencies are adopted for payments worldwide, there is some troubleshooting and overall tuning up to be done. Also, a clear path for its realization should be laid out. This is where payment apps and portals come in, and the future of money and payment is heading. Last year, digital and mobile wallets accounted for about 45 percent of global e-commerce payment transactions. Some payment apps, such as Circle or Square, already offer their users the chance to buy and sell cryptocurrency, making digital tokens very similar to virtual cash. However, it is too early to use cryptocurrency on a mass scale for such purposes. There’s still a lot of work to be done in this direction. These apps should make cryptocurrency transactions clear and understandable for everyone, thus helping the adoption of cryptocurrencies into the mainstream market. Some banks have already started to incorporate elements of blockchain distributed networks to revamp their services, hoping to attract new customers and promote the use of cryptocurrencies as a currency. However, it will likely take a long time for people and banks to accept cryptocurrency as a day-to-day payment means.
To turn cryptocurrency into a mainstream payment method, people should be able to use it in their everyday activities. To begin with, a transition from crypto to traditional money will be required. Retailers and business owners will not be willing to accept the transfer cost themselves or accept the currency fluctuation risk. Thus, payment companies will play a crucial role in facilitating this transition.
Exchanging Payments
Multifunctionality is the keyword when it comes to cryptocurrency wallets and exchanges. Cryptocurrency-based payment solutions should be versatile, offering various additional services such as investment management tools or safe storage. Just being a great cryptocurrency exchange or cryptocurrency payment system isn’t enough. Companies will have to offer an entire ecosystem that people will use in their everyday lives.
The Crypto Future Isn’t So Bright. Or is it?
However, there are some concerns. As cryptocurrencies face bans in more than 50 countries and critics say the new technology is wildly unregulated and empowers criminal groups, terrorist organizations, and rogue states, questions arise. Do cryptocurrencies have a future? The answer is complicated. Cryptocurrencies will hardly topple the dollar or other major central bank-issued currencies, but their technology will change how we conduct payments, banking, and other financial transactions. These changes will bring many benefits. But it is governments that will play a key role in making crypto payments widely available and accessible for consumers to see the benefits.