Very little has managed to disrupt the global digital economy to such an extent like the advent of cryptocurrencies. As a result, they have been under intense scrutiny and criticisms which has, in turn, put them in the constant spotlight.
Established as a payment option, cryptocurrencies have been noted to be slowly advancing towards dominating the payments market and relegating the traditional options to the backseat.
In this article, we will discuss some of the reasons why cryptocurrency transactions and cryptocurrencies, in general, appear to be gaining momentum in the online payments market.
Table of Contents
Reasons why you can accept Cryptocurrency as payment
Concentration of Power
Decentralization appears to have taken the central spot in the crypto world, which is one of its major allure as a payment option. Cryptocurrencies are built to eliminate any type of third-party entities such as banks, government, etc. Transactions are carried out directly between peers on a network.
That said, cryptocurrencies and crypto transactions are created to give users full control over their accounts. Users have the power to decide what happens with their balance without having to report activities to anyone, provided, of course, they donâ€™t engage in criminal schemes.
Whatâ€™s more, it is not possible for your account to be frozen or blocked by anyone. You can always be sure that your funds are at your disposal.
Traditional payment methods like Visa or PayPal are designed to give users instant payments, and while this works to a certain extent, it is sometimes ineffective. Sometimes, transactions could be delayed for days due to a glitch in the system or if it deems your transfers suspicious.
Crypto transactions give users instant payments with no severe glitches. They are much faster than traditional payment systems and much more reliable. If you input correct wallet address of the recipient, chances that he will not receive the money are close to zero.
As for the speed, it has been confirmed many times that some crypto services take no more than 10 seconds to complete payment. For example, transactions using Rippleâ€™s service xRapid are verified to take less than four seconds, while the Stellar network requires 2-5 seconds.
Tamper-Proof and Seamless Transactions
Blockchain technology gives crypto transactions the special feature of being transparent. Since all data transfers have to be registered on a public digital ledger, any interested party could easily find it and monitor each transaction.
Because Blockchain is built in such a way that you can only add information to the chain of blocks and not go back to change previous blocks, the technology is credited for being tamper-proof. If a hacker wanted to alter the public ledger, for example, she would need to modify the entire chain. This would be impossible, however, because copies of the chain are spread across all users of the network.
This is one reason why crypto transactions are becoming increasingly popular â€” the possibility of your payment being blocked or intercepted is close to zero. Of course, this does not mean that they are impossible to hack. Unfortunately, skilled hackers found ways to steal data and money, but most of these cases were due to the usersâ€™ negligence, rather than blockchainâ€™s malfunctioning.
The Future Value
Forget about constant criticisms that digital currencies face every day. Focus instead on how far they have gone since the creation of Bitcoin back in 2009. It shows that these currencies are fast advancing and showing no signs of stopping soon.
With the global economy going toward full digitization, there is a possibility that cryptocurrencies will be the preferred payment option in the future.
Technology might be positively advancing, but it is not without its pitfalls. The security of transactions has been at the forefront of discussions in the digital economy. No one wants their money to get intercepted by unauthorized entities.
Unfortunately, hacks and data breaches have become a common thing today, damaging millions of institutions and individuals worldwide. Even though most of the payment services do their best to protect users, intruders still find ways to get away with stolen funds.
Luckily, cryptocurrencies are here to minimize these attacks. By using cold and paper wallets, your crypto coins are basically impossible to steal. The only way for an intruder to get her hands on your money is to steal the paper with your wallet credentials.
Cryptocurrencies certainly have a promising future. It is true that they arenâ€™t fully adopted yet, but it is also true that the increasing number of institutions are investing money into crypto startups. Itâ€™s not hard to guess what comes next, especially when big players such as Facebook, JPMorgan, and Amazon start accepting crypto payments.
To find more information about crypto transactions and cryptocurrencies in general, check out the infographic that follows.
52 Facts and Stats on Crypto Mining and Transactions – Infographic
How does a crypto transaciton work?
- A wants to send money to B.
- A opens his Bitcoin wallet (usually an app), fills the amount in along with B’s public key.
- Both A and B Bitcoin wallets contain a public and a private key.
- Public Key: Ensures the ownership of the wallet and enables you to send and receive funds.
- Private Key: As the name randomly generated, and aids in successfully completing a Bitcoin transfer.
- Once A submitted the payment, the pending transaction is broadcasted to a network of computers known as miners.
- Miners verify the transaction by calculating complex hash functions.
- Approximately every 10 minutes all pending transaction are collected into a block. Blocks contain 1MB of transaction data on average, and are added to the chain – hence the name Blockchain.
- A’s transfer to B is now added to a block indicating a successful transaction.
Crypto mining stats and facts
- China maintains about 60-75% of the Bitcoin mining network.
- South Korea is the most expensive country for mining a single Bitcoin, with costs coming in at $26,170 per coin.
- Canadian firm Hydro Quebec offers lowest electricity rates in North America to 30 large cryptocurrency miners it hosts on its network.
- Venezuela is the cheapest country for mining where the cost of Bitcoin token is $531.
- More electricity is used to mine Bitcoin than the aggregate electrical utilization of the world’s 159 smallest countries.
- Most of the world’s Bitcoins will be mined by 2036.
- The Antminer S9 from Bitmain is the most efficient Bitcoin Miner.
- An estimated 418K people have invested at least $100 in cryptocurrencies in their lifetimes.
- In the first six months of 2018, an estimated 787,000 malicious cryptocurrency mining software were detected.
There are 28M Blockchain wallet users at the end of September 2018.
After every 2016 blocks generated:
- Bitcoin and Bitcoin cash will adjust difficulty in order to keep the block generation time at 600 seconds.
- Litecoin will adjust difficulty in order to keep the block generation time at 150 seconds.
- In the case of Ethereum (ETH), the difficulty is adjusted dynamically so that on average one block is produced by the entire network every 12 seconds.
- The Bitcoin block mining reward halves every 210K blocks, and the coin reward will decrease from 12.5 to 6.25 coins.
- More than 80% of BCH has been mined by the end of April and the BCH hashrate has been around 3.5 to 4.5 exahash per second.
- On August 31st 2018, a froup of 14 Ethereum developers have reduced the Ether rewards for miners to 3 ETH.
- For Litecoin, the reward per block is divided by half every time the 840K block goal is reached.
The total number of Bitcoins left to be mined accounts to 4,293,388.
Crypto transactions stats and facts
- Bitcoin network processed about 3 transactions per second and can go as high as 7.
- It takes nearly 8.8 minutes to confirm a Bitcoin transaction (As of October 2018).
- Average Bitcoins sent per hour 82,908 BTC ($464,851,914) (as of 15 November, 2018).
- Ethereum can handle about 15-20 trasanctions per second.
- Bitcoin Cash can handle about 61 transactions per second.
- LTC can handle about 26 transactions per second.
38% of cryptocurrency users were based in Asia-Pacific.
- BTC: Average Transaction Speed – 78 minutes.
- BCH: Transaction settlement time is estimated at about 60 minutes.
- LTC: Transaction settlement time takes about 30 minutes on average.
- ETH: Average Transaction Speed – 6 minutes.
Infographic Source: Crypto Transactions and Mining Made Easy