How To Accept Crypto Payments Table of Contents
More businesses are now accepting this virtual currency as a form of payment. Cryptocurrency is not just used for digital trading as it is now slowly being used in our day-to-day stores- e-commerce and brick-and-mortar stores alike. It is no surprise since this form of transaction is a revolutionized one that could benefit its users. As business owners and consumers have seen its benefits, many don’t know how to go about it. Not to worry, this article will be breaking down accepting crypto payments, and how they work.
Before diving into crypto payments and their mechanism, we need to understand what cryptocurrency really is.
Cryptocurrency is a decentralized digital currency that enables direct transactions. The feature that makes crypto most appealing is the fact that it is decentralized. This means that there is no third party. Unlike traditional financial institutions, crypto does not have any central authority. It is also very difficult to hack or manipulate since it is built on Blockchain technology. Transactions on crypto are usually more direct, private, and secure.
Now that we have gotten a grasp of the meaning of cryptocurrency, we can go ahead to learn how they can be accepted. Here are the different ways you can use crypto as a method of payment:
Just like there are regular debit cards linked to your bank account, there are crypto debit cards linked to your crypto wallet. The process of using this method is quite easy and similar to its traditional form. All you have to do is swipe your debit card to pay for an item. A lot of these cards also accept the withdrawal of cash from the ATM.
This is the truest form of transaction of cryptocurrency. A peer-to-peer network is based solely on transactions without intermediaries. Here, the payer needs their crypto wallet to carry out transactions. A crypto wallet does not contain cryptocurrency as it might seem, but it contains public and private keys. These elements enable the transfer of cryptocurrency. Using the banking analogy, a public address is more like an account number. This is required if a person wants to transfer crypto to someone else. Simply put, a public address is where cryptocurrency goes to when it is transferred. A private key, on the other hand, is like a PIN used to access your crypto wallet. If you lose it, consider it gone. Therefore, it is important to keep your private key as safe and secure as possible.
Decentralization is not the only feature that entices people to crypto. It has many other benefits that make people consider it as a valid form of transaction. Cryptocurrency such as Ripple offers faster processing compared to traditional financial institutions.
Crypto is also important for international transactions. Suppose you want to transfer money to someone in another country through the traditional method, it will pass through different points and processes before getting to the final destination. With crypto, the transfer of currency is easier and direct.
The transaction is not as complicated even when dealing with people in other countries. Crypto can serve as a universal currency as it can be used from any part of the world and still be valid.
Bitcoin is the most prosperous and accepted cryptocurrency. In 2020, Bitcoin accounted for 66% of the total market cap for all cryptocurrencies. This proves how much it is being traded, and its popularity in the market. It is also the first-ever cryptocurrency as it was created in 2009 by pseudonymous founder, Satoshi Nakamoto.
Ethereum comes right after Bitcoin when it comes to market cap and prosperity. Many sores and organizations are accepting Ethereum as a valid form of payment. Due to how often it is traded in the market, business owners have seen that many people are opting for it. Hence, they make it an acceptable form of payment. Other coins that are widely used include Litecoin, Polkadot, and Cardano, among others.
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