Why should you use cryptocurrencies?
Cryptocurrencies are becoming increasingly popular. Their functionality brings many benefits both for businesses accepting payments with them and for holders of digital assets. Below you will find a resource of essential information regarding the functioning of the cryptocurrency market.
What is Bitcoin?
Bitcoin is a digital currency that enables secure peer-to-peer transactions without a central authority such as a bank or government. Transactions are tracked and publicly visible to everyone in a shared ledger called the blockchain.
Bitcoin is just one of many cryptocurrencies available today. But all cryptocurrencies operate on the same principles:
- Decentralized network management
- Reliance on blockchain technology
- Easy verification and distribution of transactions
What is Decentralization?
Unlike traditional currencies, cryptocurrencies are not controlled by a bank or government. However, they do not differ much from credit card transactions. If you have ever used a credit card or services like Venmo and PayPal, you have used digital currency. The main difference is that cryptocurrencies do not require the consent of a third party, such as a bank, to execute a transaction. Individuals can directly send cryptocurrencies like Bitcoin, ETH, and USDT to each other, and their transaction is recorded in a public ledger called the blockchain.
What is Blockchain?
Blockchain is a shared ledger that stores data in blocks, creating an immutable chain of data. Banks also record transactions in a ledger, but blockchain disseminates this information across a network of computers that verify the validity of each transaction. They are cryptographically secured, making it difficult to alter or manipulate previous transactions. This is because each block in the chain records information about the current transaction (a cryptographic key called a hash) and the previous transaction in the previous block. The result is a chain of data that, when altered, disrupts the sequence and invalidates the transaction.
What is Transaction Transparency in Blockchain?
Blockchain security comes from its transparency. Because the chain is visible to everyone, it is very difficult to manipulate. Every computer connected to the blockchain has a copy of the existing chain. When a new block or transaction is initiated, it is verified by all the others. Bitcoin and other cryptocurrencies, such as Ethereum, are becoming increasingly accepted as consumers and online stores realize their potential. Accepting cryptocurrencies also positions your business as a leader in the industry and allows it to reach new potential customers.
Advantages of Accepting Cryptocurrencies:
1. Lower transaction fees
Since cryptocurrencies are not dependent on external banking authorities, the cost of transactions can be significantly lower. Credit card providers, bank cards, and other payment processing services charge fees of 2.9% or more. You can completely avoid fees by accepting cryptocurrencies directly into your wallet. You can also choose to use third-party services.
2. More security
Crypto transactions are more secure than credit cards or other digital transactions due to the built-in security of blockchain. Advanced cryptography securely stores and transmits data, ensuring that only intended recipients can receive and process it.
3. Access to a larger market
There are currently tens of thousands of cryptocurrencies available, and this number is growing every day. Sellers are driving this growth due to low fees, but consumers are also looking for ways to use their cryptocurrency outside the digital world. Cryptocurrencies available on the market do not have to deal with currency exchange. Consumers from anywhere in the world can make purchases on an e-commerce website, regardless of their location.
4. Easy conversion to fiat currency
Crypto transactions can remain digital or be converted into dollars, euros, or pounds using external processors. The exchange rate is not subject to the economic actions of the country or bank.