Cryptocurrencies - like Bitcoin or Ethereum - have passed a major milestone this year: acceptance by local and major businesses. 4 years ago, financial pundits questioned if cryptocurrencies would grow in value, much less if they would be used in day to day transactions. It’s been 5 years since the start and the results are more than promising: every day a grand number of businesses begin accepting cryptocurrencies as payment.
If you haven’t explored how they work, cryptocurrencies, based on publicly accessible Blockchain technology, allow individuals and businesses to make transactions without a central bank. In practice, they replace our common worldwide currencies - from US Dollar, Euro, or the Yen. For a long time, governments had to back monetary systems to ensure people weren’t “cheating the system” by spending the same money twice. Cryptocurrencies solve that problem by using computer networks that are structured to make it harder to get struck by lightning 10 times in a row than to double spend even once. While the algorithms are complex, they are mathematically secure to be resilient to any attack or hack.
While Bitcoin is priced at over $7,000 per bitcoin currently, users can buy partial coins and hence don’t need to spend thousands of dollars to utilize the platform. It could be used for simple transactions like $3.50 for coffee or a few dozen bitcoins to purchase a car.
So where are these cryptocurrencies accepted? Companies including Subway, Victoria’s Secret, and Microsoft accept cryptocurrency as payment for sandwiches, lingerie, and online store applications respectively. They may be a minority of current large businesses, but a clear sign that more and more businesses will open up to cryptocurrency to support blockchain enthusiastic customers. Local businesses are far connected to the process: 260,000 local businesses in Japan alone are transitioning to cryptocurrencies via services like Recruit Lifestyle.
Amazon competitor, Overstock.com, recently started accepting cryptocurrencies as payment, and flight search and purchase platform, Expedia.com also joined the group. All online stores powered by Shopify - often used by celebrities and designers to sell merchandise - also accept cryptocurrencies as a payment option. Even luxury car manufacturer, McLaren, has started to accept cryptocurrency for its $100,000+ expensive line of vehicles.
Major credit card tech companies, like Stripe and Braintree, enable developers to accept cryptocurrencies as easily as accepting credit cards. Not only is the process of implementing Bitcoin and Ethereum payments simple, Stripe and Braintree also service a grand majority of online tech companies that don’t do payments in house. With their support for cryptocurrencies, major apps on your phone could quickly adopt cryptocurrencies without a major transition cost.
Likewise, companies like Square that manufacture next-generation credit card machines for stores and often-times coffee shops, have opened talks of a Bitcoin option to make it easy for their vendors to start accepting cryptocurrencies with a click of a button.
Even for the executives still cynical of crypto-currency's stability, accepting cryptocurrencies as payment is relatively low-risk since platforms like Stripe could convert back into fiat currencies like US Dollar upon payment. Hence, buyers would pay at the active trading price for a specific crypto-coin against a fiat currency, and the vendor would get the proportional rate.
Phone apps like Dether are also channeling the growth from the opposite angle. Users can download the Alpha version of Dether to spend Ethereum seamlessly at approved stores using their smartphone. They could pay other Dether users easily using the app, serving a bulk of typical bank-account features. The logo is a stylized location icon to indicate Dether global reach - where users can pay and trade with people worldwide without having to transfer currencies via multiple channels or paying for expensive money transfers.
This is the most remarkable thing about cryptocurrencies - their inherent computerized basis makes their integration easy for both consumer and vendor technology without having to consult major financial institutions that currently barricade the monetary system. Blockchain technologies have a superior model for business growth, so their adoption by both vendors and customers is only a matter of time.
For the day to day consumer, is there benefit to using cryptocurrencies over US Dollars? Definitely. There are critical advantages for making international purchases when using cryptocurrencies due to no major roadblocks commonly found in the older methods. Users are dealing with a completely computerized process, and unlike credit card numbers, don’t run the risk of their details being stolen. And with the easy conversion to fiat currencies, cryptocurrency users don’t lose out on stores that haven’t made the move yet to accept Bitcoin or Ether yet.
Most importantly, once cryptocurrencies stabilize in the future, they won’t be subject to political shocks such as Brexit that could induce major financial crashes on the monetary system. While Bitcoin and even Ether still have some volatility in their price against US Dollar, that is natural due to their very recent adoption. Once the rate of buying and selling Bitcoin and Ether stabilizes, the same risk won’t be present and will be mathematically more stable than the currencies backed by governments.
It’s only a matter of time before cryptocurrencies get their segment in economics curriculum in classrooms, and their rapid adoption by stores, digital technology vendors, and day to day users in the past 5 years is more than promising. Haven’t taken cryptocurrencies for a spin yet? Consider downloading an app like Dether to get started.