The popularity of cryptocurrencies has never been higher, as more and more people across the globe look to invest in these markets and capitalize on their growth. At the same time, it’s important to remember that cryptocurrencies also function as a wallet utility that can be used in day-to-day transactions.
Bitcoin and Ether remain two of the most common cryptocurrencies used today, but the market continues to expand as more digital options are made available. Anyone looking to get started with crypto investing or transaction management has the option of buying from literally hundreds of choices.
But you also need a way to store it and spend it.
New companies that allow you to easily do both are popping up like flowers in the spring. One such service, CoinPayments, allows you to group all of your currency balances into a single account and use it on different online shopping platforms.
Here are some key reasons to use cryptocurrency:
Blockchain security
Cryptocurrencies like Bitcoin and Ether are fundamentally different than how most average consumers use cash, checks, or credit cards today. These new currencies are built on a purely digital technology called blockchain, which boasts robust security features through encryption.
All cryptocurrencies rely on a financial ledger system, similar to how a checkbook or online bank account works. Each transaction is recorded in the ledger in order to track which entities own which parts of the blockchain. However, unlike checking accounts, cryptocurrencies do not have any central bank or authority to manage these transactions.
Because the blockchain ledger is distributed across the world through a number of computer networks, there is a very low risk of fraud or transaction interference. All of the systems on the network run computational algorithms to maintain the integrity of the blockchain and process new transactions. This type of infrastructure is known as a peer-to-peer network.
When you first open an account, you can register for a digital wallet of Bitcoin, Ether, or one of the many other publicly available currencies. By your doing so, your wallet will be assigned both a public and a private encryption key. These work together to keep all transactions secure, similar to how a virtual private network (VPN) uses encryption to maintain your online privacy.
And as a VPN encrypts your internet connection and reroutes your IP address to keep hostile entities like hackers from finding you online, blockchain works to protect your cryptocurrency from the same bad guys. Each time you initiate a new crypto transaction, a new block is added to the global blockchain with the transaction details encrypted by your private key.
The desired recipient must be able to use your public key in order to accept the request and process the rest of the transaction. While this happens, all of the nodes on the blockchain network use their algorithms to validate the exchange.
Conversion to international currencies
Cryptocurrencies like Bitcoin and Ether don’t care where you are physically located. A share of the blockchain is worth the same whether you live in the United States or in Africa. In this way, cryptocurrencies act as global financial solutions that require minimal overhead or account requirements.
Though there is a growing list of major retailers who accept crypto payments, it’s not exactly easy to operate your entire financial life around blockchain technology yet, so you will likely need to maintain an investment in traditional cash and credit systems. Fortunately, there are crypto management solutions that let you manage deposits and withdrawals with external accounts.
In order to add credit to a digital wallet for use with Bitcoin or Ether, you’ll first need to fund the wallet through a normal checking or savings account. After that, you can choose to begin making crypto transactions or else simply keep the credit in your account as a financial investment.
At any time in the future, you have the ability to sell your stake in the digital currencies and withdraw the money into a bank account with U.S. dollars or a number of other international currencies.
Minimal transaction fees
When considering making an investment into Bitcoin, Ether, or one of the other cryptocurrencies on the market today, ponder more than just the exchange rate with your traditional currency. You need to keep in mind all of the benefits that come with blockchain technology, including the low transaction and account fees.
In the traditional financial world, large companies that manage your money are constantly charging you for their services. Some of these are obvious, like the account fees that brokerages and mutual funds require, while others are less transparent, like the credit card transaction fees that are factored into many merchants’ prices. These sorts of charges may feel like a requirement in today’s economy, but thanks to the cryptocurrency boom they don’t have to be.
Because of its peer-to-peer infrastructure design, the blockchain has no central authority that takes a cut from investments and transactions. You are only responsible for paying fees to the company that you use for exchanging money between cryptocurrencies and external accounts. If you shop around, you can find rates as low as 0.5 percent.
Web and app integrations
Considering that the blockchain is a completely digital-based technology, it makes sense for it to have a wide range of integrations across the internet. Customers have the ability to pay with crypto wallets through platforms like Shopify, WooCommerce, and Magento.
Another key advantage of cryptocurrencies is that online transactions are settled immediately, in contrast with credit card purchases, which can take days to complete.
Final thoughts
If you are a small business owner who wants to jump onto the blockchain bandwagon, you can add support for cryptocurrencies to your existing website or mobile application. Services like CoinPayments offer a full application programming interface (API) and shopping cart plugins to make Bitcoin, Ether, and others available to your customers. Shoppers can either log into an existing account or else use their own blockchain wallet to complete a transaction.
This article was written by Gary Stevens from e27 and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
