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As the user base of cryptocurrencies increases rapidly, so does the number of businesses that accept Bitcoin and other forms of cryptocurrency as payment. Specific payment gateways have been developed to help crypto investors pay for their goods and everyday services easily.
All the advanced features are designed to prevent you from typing long addresses and making mistakes while doing so. You can also use debit cards based on cryptocurrency, which helps pay for anything you buy in fiat money.
Paying for the things you buy in cryptocurrency helps you pay faster and without encountering many taxes. You can also make international transfers easily without converting between different currencies.
Instead of using a wallet for this purpose, you should use specifically made payment platforms since they also have dedicated customer support. However, these platforms might be less anonymous and might charge you fees for every transaction.
So, instead of speculation and long-term investments, you can also use your bitcoin and other cryptocurrencies for payments. Many small and large businesses around the globe have started accepting cryptocurrency as a mode of payment.
How Do These Payments Work?
To put it simply, a specific cryptocurrency is exchanged between two wallets during a cryptocurrency transaction. In order to do it directly from your wallet, you will require the public address of the receiver. After acquiring the receiver’s public address, you have to copy and paste the address into your wallet and make the transaction. No matter how easy it might seem to be, the process can get a bit tricky for new users.
Moreover, there are so many technicalities included in this process that it is easy for anyone to make a big mistake. Since cryptocurrency transactions are never reversible, you lose all of your money forever.
To avoid cryptocurrency transaction related mistakes, certain wallets and payment platforms have introduced foolproof cryptocurrency payment options. You can go through the whole lengthy process of sending crypto from one wallet to the other within a few seconds.
Why the steps of every cryptocurrency transaction might vary depending on the payment platform you are using; here are a few common steps.
- You create a crypto wallet and deposit a specific amount of bitcoin in it.
- In order to receive cryptocurrency from your wallet, the receiver will have to generate a QR code to let you scan that code directly to make the transaction. The QR code also contains transaction details, like the amount of cryptocurrency in dollars that you have to send the receiver.
- You can now use the application on your mobile phone to scan the QR code and initiate the transaction. Remember that the transaction is always done at the current market value of the cryptocurrency you are using.
- After being initiated, the transaction is done in just a few seconds or minutes.
With the recent modernization in payment techniques, it will take just a few clicks for you to transfer cryptocurrency from your wallet to your favorite restaurant’s wallet. This type of transaction is way easier and safer as compared to making every crypto transaction manually.
Benefits of Crypto Payments
There are countless benefits of crypto payments for cryptocurrency investors and bitcoin holders. You do not have to convert your cryptocurrency into fiat money first in order to pay for goods and services. This means you will only have to pay a minimal transaction fee every time you want to buy something with bitcoin. This is way easier and safer as compared to transferring the value over to your regular bank account and then making the transaction.
Let’s discuss a few obvious benefits of crypto payments.
Acts Like Your Own Property
We all know about cryptocurrency mostly because of its anonymity and decentralized nature. The same is true in the case of cryptocurrency transactions as well. For example, as long as you have the login and password of your digital wallet, you are the only owner of your bitcoin, and no one else, not even any government or organization, can mess with your money.
In contrast, the money you deposit in your regular bank account is not considered yours legally. Once your money is deposited in your bank account, your bank takes hold of your money and uses it on your behalf.
Moreover, whenever you make a transaction from your bank account into another bank account, your bank acts as the third-party between you and the receiver. Insured, you are totally relying on your bank to be truthful and act as you guide them.
In the case of cryptocurrency, everything is different. You don’t have to involve any third party when you do business with someone or sell your bitcoin to any investor. In the crypto world, every transaction is peer to peer, and there’s no third party watching over or controlling the transaction.
Secure Transactions
When you start paying with your bitcoin or any other cryptocurrency, you don’t have to look for a reliable name, as in the case of banks and other financial institutions. The integrity of crypto transactions is because of the trustable code behind every coin. The encryption and decentralized nature of crypto allow more people to trust them and make transactions without involving any third party.
Once a transaction is made on the blockchain, it stays on the public ledger forever, and anyone can confirm it easily. This is the main reason why people who don’t trust banks with their money have started to use cryptocurrency as their default payment method.
Easily Traceable Transactions
Cryptocurrency uses nodes to decentralize its data storage. Every transaction on the blockchain is stored on some node, which isn’t controlled by anyone. The whole series of transactions from one account to the other is securely stored on the blockchain, and it can’t be edited or removed by anyone.
Every device on the blockchain network is used to store the details of every transaction, and all the transactions are irreversible. No sender can reverse the payment once it shows on the blockchain. You can also confirm any recent transaction on the blockchain.
By using blockchain explorer, anyone can easily trace a transaction.
Designed Like DNA
Another benefit of making and receiving crypto payments is that they act as a DNA structure, and no central bank or any organization can stop a transaction from happening or reverse it after it has taken place.
On the blockchain network, every node has the entire blockchain stored on it, and therefore, even if several devices disappear from the network at once, the network still stays intact. Our DNA works in the same way. Every cell in our body contains our complete blueprint.
So, you won’t have to worry about any bank looking into your finances when you use the blockchain network and make transactions using crypto.
Better Than Fiat Money
For a long time, the USD has been used as the reserve currency for the whole planet. That’s because the dollar was originally backed by gold. However, during the Vietnam war, USD began to be printed in large amounts because the US government needed a lot of money to fuel the war. That’s when the gold price started to hike up. President Nixon later decided that the US dollar won’t be backed by gold.
These days, the money we use daily is backed by nothing but our trust in the government. Governments around the globe use this blindly printed money to buy military equipment and to dinghy wars. As a result of this, the reserves of FED and ECB have crossed the 4500 billion mark. But this can’t continue forever as fiat money isn’t backed by anything.
This is where cryptocurrency comes into the game. The value of cryptocurrency increases and decreases directly according to the number of people showing interest in it. Moreover, the blockchain system makes the whole thing much more reliable for every investor as no one can control or fool the system. We can also put a maximum limit on every cryptocurrency. For example, there can only be 21 million bitcoins.
Moreover, cryptocurrency has lots of beneficial features like privacy, anonymity, and others which make it more desirable for businesses.
So, accepting and holding cryptocurrency might actually help grow your assets in the long run.
Instant Payments
Cryptocurrency-based payment systems are one of the only valuable uses of the blockchain technology we’ve discovered so far. Every cryptocurrency like bitcoin uses standard encryption and privacy protocols during its creation.
Because of the decentralized nature of Blockchain, you can make cryptocurrency payments almost instantly, and they start showing on the Blockchain immediately after the transaction. So, for instant payments, you should start using crypto payments.
Easily Portable
Cryptocurrency can be stored in a digital wallet, and you can access it from your device from anywhere around the globe. You can also use a USB stick to store your cryptocurrency in the form of hardware. You can also use a credit card made by any popular cryptocurrency exchange or wallet to store your cryptocurrency.
On the other hand, taking physical money, or even the money in your bank, to another country is very difficult, and transaction fees can also be quite high. On the other hand, you can easily access your cryptocurrency wallet from anywhere without paying extra fees.
Good For Unbanked People
Even in this age of digitalization, millions of people around the globe do not have access to a bank account. However, almost everyone has a smartphone these days. So, cryptocurrency wallets allow everyone to make secure and fast payments through biometrics right on their mobile phone.
Therefore, crypto payments can bring prosperity to many developing and underdeveloped nations around the globe.
Privacy
Whenever you use your bank account to make a transaction, you will have to provide all of your personal details. On the other hand, cryptocurrency payments do not require any of your personal information. Anonymity is one of the top features of crypto transactions.
The level of privacy you get while making a transaction varies from coin to coin. For example, some of the recent cryptocurrencies like Dash have a high level of anonymity in transactions.
Unlimited Addresses
Once you access your crypto wallet, you can create as many addresses like bank accounts as you want. You can use this feature to make a specific address in-store with a small amount of cryptocurrency in it for additional safety.
For example, if you have $10,000 worth of bitcoin in your wallet, you can create a separate address and transfer, for example, a hundred dollars worth of bitcoin in that address to pay for a specific good or service.
In short, you carry a whole bank in your pocket when you decide to use a digital wallet and cryptocurrency to pay for everything you buy.
Secure Smart Contracts
With the help of Blockchain technology, you can transfer the value of every three-dimensional object in this world to the Blockchain. For example, you can convert your house into a smart contract and trade it on the blockchain with transparency.
By using Blockchain for smart contracts, you can exclude any government organizations and third parties from your transactions, and they can happen smoothly and without you paying fees.
Due to these benefits of Blockchain technology and crypto payments, more and more businesses around the globe are converting to this digital form of payments and are ditching the traditional banking system.
Drawbacks of Crypto Payments
Just like everything else in this world, cryptocurrency payments come with their own flaws as well. Most of these drawbacks are due to the novice nature of Blockchain.
High Volatility
The volatility of cryptocurrency prices is one of the biggest drawbacks you should consider before investing in any cryptocurrency. The price of bitcoin and every other coin keeps fluctuating 24/7, and you can either make a profit or suffer a loss after investing in that coin.
So, before making any type of cryptocurrency payment, make sure that you are paying a fair price.
Low Acceptance
Even though businesses have started to accept cryptocurrency as payment, the number of businesses doing this is really low. The same is the case with people as well, which, because of the high volatility of this mode of payment, are too scared to use it regularly.
Moreover, in order to accept crypto payments, you will have to invest in extra hardware like QR code generators and will have to make a digital wallet as well. This hassle is enough to keep most businesses away from this type of payment system.
Additional Taxes
If you are using a centralized crypto payment system for your business, you will have to classify all of your crypto holdings as your financial gains, and their value will be calculated according to the market value at the time you received the cryptocurrency.
So, if you are thinking that you will evade taxes by using cryptocurrency as your go-to payment option, you are wrong.
How Can Businesses Accept Crypto Payments?
If you are running an online business, you can also integrate several crypto payment options for your customers. Many e-commerce platforms have started to recognize Crypto Payments, and you can take advantage of this feature to scale your online business.
Here are some of the best methods you can use to receive payments in the form of cryptocurrency.
Through PayPal
PayPal is one of the biggest online payment processors worldwide, and they are now expanding their services into the world of cryptocurrency as well. This intelligent move by PayPal has made it easier for everyone to use cryptocurrency like bitcoin and others to pay for goods and services online.
Millions of people around the globe have started using PayPal only because of its cryptocurrency feature, and the popularity of the platform continues to rise to this day.
Through NowPayments
Another popular option you can choose is NowPayments. The platform is currently used by many online businesses for receiving both fiat money and crypto payments. NowPayments supports more than 100 crypto coins.
Do It Manually
If you do not want to include any third-party software between you and the sender, you can also use the manual method to receive any quantity of cryptocurrency. Since the whole purpose of cryptocurrency is to decentralize the payment system, you can also easily send and receive cryptocurrency manually.
For manual crypto transactions, all you need is your address, and the sender will use the address to send the specified amount of cryptocurrency to your digital wallet.
Use BitPay
BitPay is still a relatively new payment processing platform, but it has quickly gained popularity because of its swift and secure transactions.
True BitPay, any business can receive cryptocurrency payments and convert them into fiat money automatically. This way, you do not have to worry about the price fluctuations for bitcoin and every other cryptocurrency.
So, if you want complete peace of mind while making transactions, you should definitely use online bitcoin payments as your mode of buying goods and services. Always use a secure platform to make the payment and save lots of valuable time.
Crypto Comeback Pro is a crypto trading tool for investing in the crypto market with an %88 average win rate on trades and is the #1 trading software for crypto traders from all around the globe in 2022. Try it For FREE Today. (Ad)
