Cryptocurrency payments are gradually entering various business segments, covering more aspects of our lives. This is due not only to trendy developments but also to the real benefits for ordinary people and businesses, both small and large. Below are the main advantages of cryptocurrency payments over traditional fiat currencies.
Payment Security
Cryptocurrency transactions go through the blockchain network, where information is stored on multiple devices rather than in a single database. This reduces the risk of failures and ensures the security of data for each transaction. Moreover, cryptocurrency payments provide anonymity—there is no need to provide personal data or other confidential information, just an email address.
International Transfers without Restrictions
Cryptocurrency is not tied to any specific country or fiat currency, allowing payments to be made anytime and anywhere, regardless of the operating hours of financial institutions, as well as banking restrictions on the geographical directions of international transfers.
Low Fees
In most cases, fees for cryptocurrency transactions are significantly lower than those for traditional payments. For example, the average fee for bank acquiring ranges from 4-8%, whereas cryptocurrency payment systems charge fees at levels of 0.5-3%. The higher the turnover, the lower the fee. For instance, at Cryptadium, the maximum fee is 0.9%, and with high turnovers, it is even lower, at 0.7%.
Accelerated Transactions
Cryptocurrency transactions are carried out almost instantly, making the payment process faster and more convenient for customers. A single crypto transfer takes from 3 to 15 minutes, while bank transfers can take from 1 to 3 business days, and sometimes even up to a week. Additionally, crypto processing operates around the clock, even on weekends and holidays.
Less Susceptible to Inflation
The number of cryptocurrency coins is limited, which prevents their rapid devaluation. For example, the total number of bitcoins is always capped, unlike traditional currencies which have unlimited issuance. Every four years, the volume of mining is halved, which helps to curb inflation.
Disadvantages of Fiat Currencies
We are accustomed to traditional currencies, and their disadvantages are often not obvious. However, they exist:
- Dependency on laws and sanctions: The state fully controls monetary processes.
- Lack of anonymity: Banks control fiat transfers, requiring named accounts. Transactions can be canceled.
- High fees for international transfers.
- Susceptibility to inflation: Unlimited issuance leads to inflation.
- Possibility of counterfeiting.
- Slow transactions: International transfers can take several days.
Despite the clear advantages of cryptocurrencies, this type of payment medium is far from perfect and has its drawbacks, which any user must know. Different countries have different laws, which complicates unified regulation of cryptocurrencies. Moreover, the cryptocurrency rate can change sharply, sometimes leading to losses. Cryptocurrencies are not controlled by the state, and in the event of fraud, users have no one to turn to, although such cases are fewer than in traditional systems.
Another downside is the stereotypes and negative attitudes towards cryptocurrency from those who are unfamiliar with it. Many believe that cryptocurrency is complex and used for illegal purposes. However, once people understand blockchain technology and its advantages, their views often change for the better. After starting to use it, they soon cannot imagine how they lived before without this accessible and convenient means of payment.
