Cryptocurrencies are a viable alternative to traditional mediums of exchange for buying goods and services. In a similar way that fiat currencies operate, people can now rely on digital currencies to execute everyday payments via mobile wallets, QR codes, and even cryptocurrency debit cards. Yet, here are some debates on whether it is a good idea to make your payments using cryptocurrencies, such as Bitcoin, Ether, etc.
For example, some might argue about the volatile prices, which makes crypto payments inconsistent and risky. In most cases, people refer to Laszlo Hanyecz, a Florida computer programmer, bought two pizzas for 10,000 bitcoins. By that time, the price seemed reasonable, but he could be a billionaire if he knew that the digital assets would appreciate significantly in years to come.
Advantages of paying with cryptocurrency
We now live in a digital world, one that calls for digital solutions. Especially when it comes to finances.
Today, we communicate instantly with anyone across the globe for pennies on the dollar. Why do we still need to pay filthy commissions to remittance companies? Blockchain, the technology behind digital currencies, makes them fast, flexible, and global.
Low transaction fees
Shopping with a debit or credit card is practical. All you need to do is swipe it and be on your way. But this payment method can easily hide fees on each purchase. The main reason is that plenty of parties are involved in your transactions.
The charges you incur are even higher if you are buying something from another country. You will have to think about the conversion rates.
On the other hand, cryptocurrencies have done well in eliminating third-party intermediaries in transactions. And no middlemen make it possible for you to pay low transaction fees.
Paying a freelancer? Sending money to your friends or family? With solutions like Crypterium, you can transfer funds instantly with zero commission. And all you need is the recipient’s phone number.
Cryptocurrency transactions are irreversible. Once a deal is complete, no one can undo it, and you are immediately entitled to the goods or services you have paid for.
Of course, there are some exceptions. If you are using a cryptocurrency wallet like Crypterium and you transfer funds to another user off-chain, the transaction can be quickly canceled. In this case, you can benefit from both the speed and flexibility of cryptocurrencies within a secure environment that offers an additional piece of mind.
Believe it or not, volatile cryptocurrencies like Bitcoin can serve as reserve currencies in countries unable to handle inflation. Many governments are mismanaging their economies to the point that fiat currencies are rendered useless by hyperinflation.
In Venezuela, inflation reached nearly one million percent, and the workers’ wages were reduced to almost nothing. The money quickly loses its value, and residents are converting the local currency to digital assets such as Bitcoin or stablecoins like USDC and USDT.
The logic is simple: cryptocurrencies can appreciate, and at the same time, be used for day to day payments.
Disadvantages of paying with cryptocurrency
Fair enough. Cryptocurrencies are not perfect. But neither are fiat currencies… Flammable paper notes, seriously?
Cryptocurrencies such as Bitcoin and Ethereum are known for their volatility. As investments, that’s what makes them so attractive. Bitcoin’s price can easily fluctuate between 15 to 30 percent in a single session. While this volatility might be a gold mine for traders, those planning on paying for things could find it less seducing.
Imagine that you have one BTC. When you wake up, the price is $10,000 per unit, enough to get yourself a nice car. In the afternoon, the price could quickly drop 20 percent, no longer enough for the so-needed car.
At the same time, some people think that it doesn’t make sense to buy goods or services with crypto when others are using the same asset for investment purposes. Think about the programmer mentioned above.
Some people are reluctant to use cryptocurrencies for no particular reason. Since digital currencies are not regulated or guaranteed by governments, a vast majority of people may be inclined to the traditional payment method.
Yes, some digitals assets like Monero and zCash are used by criminals in the underworld because they are easier to manipulate and hide. But that doesn’t make them “criminal currencies.” After all, is the dollar a dirty currency because Pablo Escobar ran a multi-million drug cartel? You get the point.
The Bottom Line
Cryptocurrencies have not been around for a long time. Many people out there still do not understand their value against other types of payment methods, like Paypal, bank cards or cash.
However, as big companies like Facebook and Telegram prepare to enter the digital currency market, it is only a matter of time until everyone realizes about their disruptive potential.