Cryptocurrencies are gaining worldwide popularity, given the eons of benefits that they offer to society as well as to the global economy. With Bitcoin introduced in the payment services, there is no need to carry physical cash or any debit/credit cards. The increasing acceptance of cryptocurrencies like Bitcoin has made many businesses to offer payment-related services through Bitcoin and other virtual currencies of the like. How do these Bitcoin payment services work and what benefits do they offer over other modes of payment services. Read below to dig further into the details of Bitcoin payment services.
How does Bitcoin Payment Services Work?
For the first time, Bitcoin users just have to install the Bitcoin wallet on their smartphones or computer. This will generate the first Bitcoin address, which the users can share amongst their trusted circles. All reputed Bitcoin payment services offer multiple solutions across various platforms like integration with e-commerce platforms, PoS (point-of-sale) systems and also with direct payment platforms. Donations can also be accepted through Bitcoin payment services by integrating Bitcoin with donor services. Bitcoin payment services are processed via a network of private computers called ‘’nodes’’ which are linked to a shared program. Simultaneously, each transaction is recorded in a blockchain that keeps on updating each time a single transaction is added to the blockchain. Bitcoins are either mined by sophisticated computers by solving complex alphanumeric algorithms or purchased in exchange for national currencies and placed in the Bitcoin wallet which can later be processed through smart devices.
Any user (merchant) signing up for the Bitcoin payment services, can receive Bitcoin payments from the customers settled anywhere across the world, for the goods, for the bitcoin Plinko or any other services sold. After the purchase is made (either in a web or via app) customers can pay by Bitcoin at the locked-in exchange rate that prevailed at the time of purchase. The Bitcoin payment service then instantly converts Bitcoins received into the preferred currency, thereby eliminating the risk of volatility and eventually, the amount gets credited to the merchant’s account.
For authenticating each transaction and for recording them on the public ledger, the Bitcoin payment services send the necessary details of each transaction to the blockchain network. Miners who verify and authenticate the transactions are rewarded a Bitcoin for free for the efforts done in verifying and authenticating the transactions.
Advantages of Using Bitcoin as the Payment Services
There are a lot of advantages of introducing Bitcoin in the payment systems and both the entrepreneur and businesses can reap the benefits that Bitcoin offers as the payment system.
Bitcoin payment services make it possible for the buyers to maintain a certain degree of anonymity while completing their payments. Unless the buyer voluntarily publishes his financial details, purchases can never be linked with his personal details. In fact, with each transaction, the Bitcoin address changes and therefore, the buyers are less susceptible to risks of fraud.
Zero Inflation Risks
Inflation in an economy occurs when the purchasing power of the people decreases, i.e., in scenarios like when the Government issues more money than required in an economy over the time period. However, with the Bitcoin payment services, there is no such central government backing the power to issue Bitcoin whenever it feels to, thereby reducing the inflationary pressures on the economy to zero. This benefits both the buyer and the sellers.
Purchases are not taxed
There is no intervention from third parties or central banks to intercept or track any transaction that is denominated by Bitcoins and therefore, there is no place for sales tax to be added to purchases made by Bitcoin.
Reduced transaction fees
With Bitcoin payment services, the transaction fees are significantly lower as compared to the purchases made by debit or credit cards. Also, Bitcoin transfers happen very fast, without the need to wait for a long processing time.
Bitcoin payment services allow for a cross-border payment network, focusing on the seamless amount of Bitcoin transfers, to and from anywhere across the world. Any smart device having an internet connection can transfer Bitcoin of the required amount to the merchant’s account.
Each transaction involving Bitcoin is signed by an authentic digital signature before it is added to the blockchain network. It is impossible to decipher the alphanumeric code of the digital signature and therefore, cannot be hacked or manipulated by the hackers. This entire process makes the Bitcoin payment service a safer place for exchanging, storing and trading cryptocurrencies.
Transactions are immutable
Unlike debit card or credit card purchases, purchases once made by Bitcoin cannot be reversed. This is beneficial for merchants who face a lot of problems when after dispatching the products, they find that the customers have reversed the payments. Bitcoin payment services are 100% irreversible.
Therefore, the Bitcoin payment service is an emerging technology that has the robust potential to transform the global economy for the betterment by benefitting both the buyer and the sellers across the world.