There is probably no person today who has never heard of cryptocurrency. And although there are many types of cryptocurrencies now, it was Bitcoin that became the first virtual currency to see the world. Such skyrocketing popularity of Bitcoin as a payment method and its relevance for more than ten years suggests that soon we will perceive it in the same way as cash.
Bitcoin was created as an alternative to real money. The creator emphasised the decentralisation of control over the movement of funds and maximum protection against theft. Simply put, Bitcoin was designed to compete with local currencies. And now it does it. The governments of over 100 countries around the world have recognised this cryptocurrency as legal. This phenomenon marks the recognition of Bitcoin as a tool for the transfer of value by not just retail users but also nationally.
There are several ways to earn cryptocurrency. For example, you can buy them in exchange for real money, but the original source is mining. Theoretically, any computer owner can install mining software to earn bitcoins even without internet access. Every Bitcoin user has an address, which is their personal and unique identifier consisting of an address bar ranging from 27 to 34 alphanumeric characters-long address line, starting with 1 or 3.
Unsurprisingly, a Bitcoin payment is a transfer of funds in Bitcoins that a customer initiates to buy goods or services.
To make a Bitcoin payment, a customer should have a crypto wallet with some Bitcoins on it, and a Bitcoin wallet address of the merchant. When a customer puts the address into a dedicated field in the wallet, specifies the amount to send and confirms the transaction, a Bitcoin payment is made.
Many companies that have already implemented Bitcoin payment method liked the safety of online payments, the absence of fraud and chargebacks, as well as low transaction fees. Paying with cryptocurrency and accepting it as a payment method isn’t as simple as credit/debit card transactions, bank transfers or ApplePay, since these methods work with traditional currencies. To conduct transactions in cryptocurrency, a customer must have a crypto wallet (like Ledger), and a merchant must have a solution that supports Bitcoin as a currency. But lately, setting up the acceptance of cryptocurrency on a commercial site has ceased to be a problem. Many services allow merchants to accept cryptocurrencies as easily as other methods.
To accept BTC or another cryptocurrency, a merchant needs to connect special payment services or integrate technical solutions that generate a wallet address to which customers can transfer funds. Bitcoin payment method is quite easy and fast. A customer opens their crypto wallet, scans the QR code of the payment account on the merchant's website, and confirms the action with a pin code (or other means). After funds are credited to the specified account, the Bitcoin network recognises and confirms the transaction. Thanks to blockchain technology, each transaction conducted is stored in a single ledger. Everyone has access to information about all transactions, but none of the parties can change or falsify the transaction record.
Crypto transactions cannot be disputed. Plus, blockchain technology verifies that funds are available before the transaction is completed. This makes it nearly impossible for customers to complete a purchase without sufficient funds in their accounts. What's more, unlike credit card payments, the Bitcoin payment cannot be cancelled, and merchants receive all funds immediately.
Almost every e-commerce business relies on financial institutions, which complicates the transaction processing and increases the transaction cost for the company. BTC is one of the first cryptocurrencies to use peer-to-peer technology to facilitate instant payments. This technology allows online payments to be sent directly from one side to the other, bypassing any financial institutions, thereby reducing costs and increasing security.
Banks and other intermediaries involved in the transaction charge fees (usually 2% to 5% per transaction). With cryptocurrency, the payment is routed directly from the sender to the recipient, eliminating all intermediaries and significantly reducing costs. But there is also a drawback — high fees for withdrawing bitcoins to a card or e-wallet. Moreover, the Bitcoin price is not stable, which may cause certain losses.
The security of BTC payments is guaranteed by decentralisation: each block in the system is protected by encryption, and the database is distributed among the participants in the blockchain. It is almost impossible to wedge into a chain, cancel an operation, or assign a different address.
Since cryptocurrency is decentralised, businesses avoid the hassle and expense associated with international transaction fees and exchange rates. Thus, merchants worldwide have a single form of currency that is uniformly applicable regardless of location. The presence of Bitcoin as a payment method allows merchants to quickly and easily enter the global market and increase profits.
The skyrocketing popularity of cryptocurrencies is forcing merchants to adapt to the changing payment preferences of buyers. Luckily, this is very easy to do with Corefy's feature-rich payment solution that supports Bitcoin and other cryptocurrencies.