With Bitcoin’s current growth, it has all the potential to become a mainstream currency. In contrast to traditional currencies and payment methods, cryptocurrencies don’t need central banks or any kind of governing body to ensure that the value of money stays stable. The supply is limited and determined by the system’s code only. Due to this, cryptocurrencies are often referred to as decentralized currencies.
Cryptocurrencies are highly valued for their transparency, lack of transaction fees, and the possibility to transfer money worldwide without regard for borders. Moreover, cryptocurrencies can’t be counterfeited. This makes them very attractive in e-commerce. There are many situations where verification of the buyer is difficult or simply impossible. Cryptocurrencies provide a solution for online payment processing, which can save time, money, and effort. There are a growing number of vendors who accept cryptocurrencies for their products or services. This trend is driven by several factors; first of all, merchants prefer fast payments with low transaction fees. Cryptocurrencies also allow reliable third-party verification of the buyer’s identity due to the use of public key cryptography. In addition, most digital currencies have low transaction fees, so even small merchants can make good profits from them.
When was cryptocurrency created?
Bitcoin, the first cryptocurrency, was created in 2008. Since then, a number of alternative currencies has been developed. Altcoins (alternative coins) comprise a group of over 900 active cryptocurrencies today. Among them, Ethereum is currently the most popular one. The number of transactions with this currency has drastically increased from January 2017 onwards due to the launch of the Enterprise Ethereum Alliance. Ripple is also one of the most notable altcoins, and it has huge potential due to its partnership with over 100 financial institutions. Litecoin is often considered the second-most important cryptocurrency after Bitcoin. It has also gained popularity recently, although it still remains a relatively small market cap currency.
Cryptocurrencies are in a constant state of evolution, which means that there are many potential risks for new investors. Probably one of the biggest downsides is the price volatility of cryptocurrencies. The price of Bitcoin has dropped by over 50% since its high point in 2014, and it doesn’t seem to be leveling out any time soon.
- It can be difficult to fake or otherwise imitate a cryptocurrency transaction.
- Decentralized currency – no central authorities or governing bodies.
- The original format of blockchain technology uses cryptography to secure transactions and maintain the integrity of the ledger so that it cannot be cheated by any third party.
- There are no transaction fees.
- Decentralized cryptocurrency is usually not subject to government or banking policies. This means that the electronic payment system is free from most regulations and fees, making it perfect for peer-to-peer transactions.
- Since there is no central authority, digital currency users can be victims of fraud/hacks that could affect the system in general or individual accounts in particular.
- Since digital currencies are relatively new, they are still not widely accepted by merchants.
- The value of cryptocurrencies is subject to change, so the rate might not be the same as at the time of a transaction. Currency exchanges can help with this problem, but they might charge their own fees.
Why Cryptocurrency Might Replace The Usual Online Payment Solutions?
Cryptocurrency as a payment system is not yet as widely accepted as other common payment systems, but it is becoming increasingly popular. More and more companies are accepting digital currency payments due to quick transaction times and low transaction fees. The aforementioned factors combined make cryptocurrency a very attractive alternative to usual online payment solutions, such as PayPal or credit cards. In contrast to the usual verification process of credit cards or PayPal accounts, using cryptocurrencies doesn’t require the personal details of the buyer.
The transaction is made anonymously through the use of public key cryptography. This means that the payment details of the buyer will remain confidential, and only verified sellers will see the transaction. In addition to this, most digital currencies are not subject to any transaction or account fees. The problem with online payment solutions is that they usually require the personal details of the buyer, and they involve delay-related risk due to verification stages. Interested in using Bitcoin as a payment gateway for your business? Visit Bitcoin Code.
Is Crypto the Future?
Cryptocurrency is a very recent phenomenon, but it has already proven itself to be a very effective payment system. If you consider that Bitcoin was created only eight years ago, you can expect further growth of the digital currency. Moreover, many scientists believe that blockchain technology has the potential to change many other sectors of our everyday life and even completely revolutionize the economy in the long run. Many countries have already started developing their own cryptocurrencies or considering implementing blockchain technology in different sectors or industries.
Cryptocurrencies have already proved to be more than a passing fad. Even though they currently have limited infrastructure and can sometimes be overpriced by the market, it is worth keeping an open mind and investing in digital currency if you are looking for a long-term investment. This is not something that is going to happen overnight, but crypto still offers great prospects for the future.