Cryptocurrencies and the potential that they have to evolve the way our financial institutions work is fascinating. Despite recent market fluctuations, BTC price appears to be climbing once again, further helping to increase the public interest in the exciting world of cryptocurrencies. However, how much potential do cryptocurrencies actually have, and could they be the future of online payments? Here, we’re taking a closer look.
Fast & Secure Transactions
The major benefit of cryptocurrencies is the speed and security of the transactions that are made across the blockchain. The technology behind cryptocurrencies is fully encrypted and due to the public ledger on which the blockchain is based, transactions can be made almost instantly. This is a huge difference when compared to some debit or credit card transactions which can take up to a number of days to be confirmed and for money to be transferred in full.
People who are shopping online are looking for more convenient ways to purchase the products and services that they are looking for, and as a result it is highly likely that cryptocurrencies are going to help to bridge this particular gap. This is likely to be integrated alongside social networks which are slowly beginning to offer native payment systems to further streamline online shopping. The security behind transactions is also highly beneficial, and the transparency of the blockchain technology behind cryptocurrencies helps to reduce human error while minimising security breaches.
Opportunities To Reach The Unbanked
A large proportion of the population around the world is considered to be ‘unbanked’. This means that they do not have access to a bank account and are therefore unable to transfer funds. While there are some eWallets available on the internet, the majority of these require a connection with a bank account, and if not, they can require fees to transfer funds across the globe. Cryptocurrencies on the other hand are not regulated by a single entity, meaning fees and charges to transfer funds internationally are minimised. This not only helps to benefit customers who are looking to purchase online, but businesses can also enjoy minimal transaction fees, too.
Digital Currencies vs. Cryptocurrencies
Having a clear understanding of the difference between digital currencies and cryptocurrencies is important when it comes to understanding just how much of an impact the latter will have on the future of online payments. Digital currencies have all of the characteristics of traditional fiat funds, where you can exchange, obtain and transfer it for another currency, but they are only available in the digital landscape. Digital currencies are not restricted by political or geographical borders, but they are still controlled by a single entity.
Cryptocurrencies on the other hand is an asset, and not an actual currency, and are run from a decentralised ledger, although they are often classified as a form of digital currency. Structure, anonymity, transparency, transaction manipulation and legal aspects are the major differences between the two, and it is the transparency and anonymity that are really likely to push cryptocurrencies to revolutionise the way we make online payments.
Technology is continuing to change and expand, and cryptocurrencies alongside the blockchain technology which helps to create a transparent and secure set up for them are likely to continue to have a huge impact in the way that we purchase products and services online.