Why is Cryptocurrency Important?
The cryptocurrency saw a rise as a major player in the international economy in the past few years. Cryptocurrencies like Bitcoin, Litecoin, Ethereum, Dash, Ripple, etc., have already started gaining market share. Since the arrival of cryptocurrency, every aspect of the financial world has been impacted, including e-commerce businesses. Cryptocurrency is said to be a more secure alternate version of the fiat currency that we use today. Let us find out what exactly it is and why does it matter?
If you are familiar with cryptocurrency, feel free to jump to the next section.
What is Cryptocurrency?
Cryptocurrency is a digital or virtual currency secured by cryptography, making it next to impossible to counterfeit. Cambridge dictionary defines cryptocurrency as “A digital currency produced by a public network, rather than any government, that uses cryptography to make sure payments are sent and received safely.”
Cryptocurrency is secure as it has been digitally confirmed by a process called mining. It is designed to be used as a medium of exchange for buying goods or services. Cryptocurrencies are decentralized, meaning that no central bank or monetary authority regulates them. Such currencies, theoretically, are immune to government interference or any kind of manipulation. Instead, they are maintained by a peer-to-peer computer network community consisting of users’ machines or “nodes.” It is built on blockchain network technology, which ensures transparency and helps track every transaction.
Now that you know what cryptocurrency is, let us go through a few reasons why it matters.
Make Transactions Secure
Customers and merchants have always had a problem in making secure and safe financial transactions in exchange for their products. People are reluctant to buy from online sellers because they fear that their credit card information could be stolen or altered. However, with cryptocurrencies, this problem can be solved.
Firstly, cryptocurrency holders will be allowed to use the currency or convert it only if they have private keys. Without a key, the currency will be useless.
Another unique feature of cryptocurrency that makes it secure is the “wallet.” The wallet contains unique information that identifies the temporary owner of the units. The risk of theft is reduced considerably by wallets.
Another reason cryptocurrency transactions are secure is that its Blockchain technology makes data manipulation impossible. Blockchain technology is capable of detecting any type of change beyond asymmetric encryption. It is impossible to counterfeit cryptocurrencies because the source code of cryptocurrency identifies how many units are available. To avoid fraud protection, a transfer cannot be reversed once it is complete.
Immune to Government Interference
Customers and merchants will both be able to profit from the decentralization function of cryptocurrencies. Since no monetary authority regulates cryptocurrency, it will not be subjected to regulations by the government or any particular organization. No one owns it, and no one can control it.
As a result of being decentralized, cryptocurrencies allow for the exchange of units without being under the control of any banks. It provides freedom to conduct business without having to worry about different regulations in different countries.
Also, E-commerce entrepreneurs face the risk of having assets and bank accounts frozen because of political unrest in certain countries. This is impossible with cryptocurrencies due to their decentralized nature. The currency stored in digital ledgers can be retrieved from anywhere in the world without worrying about political instability or inflation.
Privacy Protection and Business Recognition
Since the inception of the internet, privacy has been a major concern. Back then, anonymity was the most profitable aspect of the internet. With the advent of technology, anonymity was no longer a profitable aspect. Cryptocurrency’s main supporters have always valued privacy and anonymity, integrity, and the value of the currencies.
Customers who want to avoid the constant scrutiny of government agencies or value their privacy will choose to shop at a place that accepts cryptocurrency. You can reach these people by establishing a cryptocurrency payment method. This will allow you to connect on a deeper level with them, so they will choose to shop at your online store.
Faster and Cheaper Payment Method
Cryptocurrency transactions are opening up new possibilities that aren’t possible in the current monetary system. Once a request has been sent for the crypto transaction, payments are made immediately.
Comparatively, cryptocurrencies are much more affordable. Cryptocurrencies have a security feature that eliminates the need for third-party processors to verify and authenticate. This reduces the transaction fees. A few third-party apps can help those who need some guidance or a tool to assist with transactions. However, fees for using these apps are typically 1 percent.
Earlier, only a few people knew about cryptocurrencies, but now they are fast becoming popular. Because this currency is inflation-proof, people need to be assured that cryptocurrency will not be affected even in case of political unrest in any country. Because of this, cryptocurrencies are fast becoming a great way to do business in the Middle East and around the world. With the rise of cryptocurrencies such as Bitcoin and Litecoin, cryptocurrency has taken over all businesses and individuals. Everyone is eager to own cryptocurrencies.
The cryptocurrency market has grown faster than expected in recent years and will continue to grow. Experts believe that cryptocurrencies will be the future of the world. They will be a part of our economy sooner than later. Therefore, more and more e-commerce businesses will adopt virtual currency.
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