Cryptocurrencies (digital currencies) are becoming an accepted tool for payments and transfers, but paying or transferring with them has many challenges. As their use keeps growing, it is time to look at how feasible it is to send, receive and pay with cryptocurrency.
Cryptocurrencies have changed our idea of money. Bitcoin (BTC) , the leading cryptocurrency, reached an all-time high in November 2021, exceeding 68,000 dollars . Companies such as Tesla and Microsoft have announced plans to accept بیتکوین as a standard payment method for their products and services.
Advantages of paying with cryptocurrency
Paying for goods or services with cryptocurrency is attractive to many and, for most merchants, the best option, because it offers near-instant transfers at minimal cost.
The following advantages are even more attractive for international payments:
It is fast
The biggest advantage is speed. Transactions are almost instant compared with traditional transfers that can take days.
It is direct
Crypto transfers are peer-to-peer without intermediaries. All transactions are permanent, visible and secure.
It is decentralized
Unlike fiat currencies controlled by governments and central banks, cryptocurrencies are not issued by any single authority; their value is independent of governments and financial institutions.
Solving the challenges of crypto payments
Smoother crypto payments depend on stability. The crypto market is currently too volatile for most people, and merchants usually want a stable currency for payment.
Stablecoins (cryptocurrencies backed by fiat currencies) solve this well. Stablecoins such as Tether (USDT) are always worth one dollar.
Security of storing and paying with crypto is another issue. If someone loses the private key to their wallet, they lose their assets forever, and keeping wallet assets safe is the owner’s responsibility. Crypto exchanges address this, since users can recover their accounts and regain access to their assets.
Because buying and selling with cryptocurrency is still at an early stage, there are few examples to learn from. Some leading international companies are listed below:
Microsoft
Microsoft began accepting Bitcoin in 2014, when it was still largely unknown. In 2016 it announced it would stop, but changed its decision a few days later.
PayPal
PayPal started accepting Bitcoin in September 2014, three months before Microsoft, to bring businesses onto its platform, which reduced transaction fees and encouraged customers to use crypto.
Overstock
Before Microsoft and even PayPal, Overstock had started accepting Bitcoin. In early 2018 CNN called Overstock a crypto company because of its heavy investment in blockchain.
Starbucks
In March 2020, just as the pandemic was spreading, Starbucks announced it would join the Bitcoin revolution.
Twitch
Twitch, one of Amazon’s most successful subsidiaries, also accepts cryptocurrency, not only Bitcoin but also Ethereum, Bitcoin Cash, Tether and others.
Many other large and small companies around the world accept cryptocurrencies, and with stablecoins like Tether (USDT), the number keeps growing.
Interestingly, governments are moving toward cryptocurrencies too.
Lugano, one of Switzerland’s larger cities, has recognized Bitcoin (BTC) and Tether (USDT) and set up infrastructure for residents to pay taxes with them.
El Salvador went further and made Bitcoin legal tender, becoming the first country to add Bitcoin to its central bank’s reserves.
The outlook for cryptocurrencies is still limited, because they are very new and much remains to be done technically, in security, politically and legally.
Still, the potential of cryptocurrencies and blockchain could transform not only global finance but global politics. Fintech (using technology to make financial services more efficient) is very hot as developers and entrepreneurs keep improving the user experience for ordinary people.