If you’re like most Americans (or Europeans and Asians), you probably can’t remember the last time you paid for something using cash or what’s known among financial professionals as “fiat currency.” That’s because experts agree both mobile and digital payment options have not only become an easier means of making transactions, they are considered a secure method of making payments. In this sense, cash is slowly but surely becoming a relic of the past.
Enter cryptocurrencies and in particular, the king of them all: Bitcoin (BTC). According to a new business report, over the past few years, cryptocurrencies have gained in popularity by leaps and bounds.
Social media giants, universities, banks, financial institutions, hedge fund managers, and in some cases, governments, now have at least some crypto like BTC on their balance sheets. One of the reasons for this is that the asset has risen in value an average of 150 percent per year since its inception in 2008.
But what are the main reasons for the shift to the digital asset? It comes down not only to the many benefits cryptos offer, but also its payment methods. Crypto’s real value, however, is said to lie in its security. No payment method is entirely 100 percent safe. That said, while crypto transactions carry some risks, they are generally considered speedy and safe.
Crypto’s Popularity
There are said to be four main reasons for crypto’s spiking popularity and as a new form of payment in 2022 and going forward.
- Speed: one major advantage for using crypto like BTC is the “speed of transactions.” A crypto transaction takes place at lightning speed. What’s more, is they cost nothing to conduct. This is one of the main reasons businesses are actually abandoning traditional payment methods for cryptocurrency-based payment solutions.
- Transparency: despite rumors to the contrary, one of crypto’s most noteworthy features is its overall transparency. Anybody can verify a crypto transaction by using any number of online devices. In this manner, all crypto transactions are public. This also means crypto is not for laundering money. Cold hard cash is still the preferred choice when it comes to laundering.
- Anonymity: Even though all crypto transactions are transparent and public, the businesses and individuals conducting the transactions are able to remain anonymous or at least, pseudonymous. While this might not be popular with governments, the fans of open-source networking very much appreciate the privacy that crypto anonymity affords them.
- Easy transactions: when conducting a crypto transaction, neither the sender nor receiver needs to go to a vendor. They don’t need to provide ID or even maintain a bank account (crypto is a boon to the world’s unbanked). All you need to do is create an online wallet and begin receiving and/or sending crypto payments the globe over. Gone is the need for a traditional, centralized bank.
The ease of making crypto payments is why many new start-ups are choosing it as their preferred payment method since the process is not only “seamless,” but it keeps the costs of doing business low.
How Crypto Payments Work
The experts state that all you need to do is register with a crypto exchange line Coinbase. Once you do that, you’re given a digital wallet that allows you to store and receive crypto like BTC. You can also use a device-based “cold wallet” that allows you to store your coins offline—a good safety measure.
Crypto wallets come with public keys and private keys. Your private key allows you to access your wallet with a password. The public key allows you to send coins. Since the public keys are visible to the receiver they change with each transaction.
All in all, the transaction can be conducted immediately and with zero cost. Try that with Wells Fargo!
The Security Of Crypto Payments
While there are many benefits of utilizing crypto payments in 2022 and beyond, the method is not without its cybersecurity issues. After all, the transactions occur online.
Generally speaking, you register with your online crypto exchange of choice to receive and send crypto coins. To purchase coins initially, you will need to provide credit card info and/or your bank account (eventually, you don’t need a bank).
Since these details will not be shared with users, technically speaking the threat from bad actors or scammers who intend to steal that information exists. This kind of thing has happened more than once in the crypto-sphere, but in almost every case the bad actor has been revealed and the crypto seized.
Why?
Because all transactions are made public on the blockchain.
