How to use Bitcoin and other coins for crypto payments
It is becoming increasingly popular to use crypto like Bitcoin, ETH and scores of others to pay for products and services online as well as in-person. Bitcoin payments are being processed by companies everywhere as people across the world are interacting through blockchain technology far more than ever before. Payment processing has intersected with the digital world as popular retailers like Microsoft, Overstock.com and many others have long begun to accept cryptocurrency payments.
It is important for us to understand cryptocurrency and its implication as a payment method and preferred medium of exchange. This understanding is the very reason Pay It Now has been working diligently on our layer 2 PIN Payments blockchain gateway solution which will integrate with the innovative blockchain-based disruption to traditional customer loyalty and rewards programs. In order to better understand crypto payments, it is important we comprehend a few fundamental concepts as well.
What factors make paying in cryptocurrency possible?
Crypto is able to be used as a payment method because of the technology upon which all digital assets and cryptocurrencies are positioned - the blockchain. A blockchain is a peer-to-peer, open source public ledger, which is used to keep account of the movement of digital currencies and other information or data deployed along the secured network - known as ‘the chain’. The transactions are verified by ‘blocks’, positioned on the public chain. The capability to process payments on the blockchain is achievable only via a blockchain payment gateway.
What are cryptocurrencies?
Cryptocurrencies are digital assets, tokens, and coins that are sent and received, between individuals peer-to-peer, and for both B2B and B2C purposes. Blockchain integrated payment processors now make it possible for individuals and businesses to send and get bitcoin and other crypto in exchange for professional services and products offered by the company or organizational brand.
Right now, the total combined crypto market represents about $2 trillion dollars in USD value, with bitcoin accounting for just under half. The digital currency industry is only becoming more heavily recognized as a potential solution for limitations in the fiat-based instruments within the traditional financial markets. Crypto is digital, so the costs associated with production and exchange are considerably less than that of fiat currencies.
Fiat is subject to forgery, counterfeiting, inflation and many other manipulative influences. The open source nature of crypto and the blockchain offer advantages that have led many banks and financial institutions to turn towards the blockchain not only as payment processing methods and currency, but also for things like hashed data storage, file sharing, and the integration of company products and services into the digital environment to add and cultivate value in the virtual front.
How to get set up for crypto payments?
In order to make payments in crypto individuals need to have an account or connected digital wallet connected with a platform that allows its users to pay with crypto online. Pay It Now (PIN) is an example of a payment processor system and network which allows the transfer, buy or sell of crypto along the blockchain - Binance Smart Chain in our case, with cross chain capability empowered through our interoperable layer-2 blockchain payment gateway. Commercial clients in the Pay It Now network have physical or digital processors which enable customers and clients to use Bitcoin, $PIN or other acceptable cryptocurrencies to be swapped and then used as a form of payment.
It works the same for any payment processor that accepts crypto payments. If the merchant is blockchain-connected, and users have an account and/or crypto wallet with an adequate amount of Bitcoin or other accepted cryptocurrency to exchange and get the desired purchase. Crypto wallets are, obviously, a common thing amongst crypto users. Most platforms either integrate a wallet connection, or have a built-in wallet or other crypto storage method for users to be able to send and receive crypto or make purchases.
Cash App, Paypal, Pay It Now & other business-grade crypto payment processors
Third-party crypto payments processors like moonpay enable its users to purchase crypto directly with debit or credit card in payment for products and services on merchant sites using the 3rd party payment gateway. Some digitally-based companies like Coinbase and Bitpay use a digital wallet concept in order to allow users to purchase crypto with credit or debit card, bank transfer or digital asset transfer from other crypto wallets.
PayPal is similar to Square Cash App, supplying their KYC verified platform users with a crypto wallet where they’re able to get access to digital assets and buy, sell, send and receive, and use them for purchases with merchants in their commercial network who actively accept digital currencies for payment. While these are beneficial, positive platforms for sending crypto and using it to make purchases, helping to increase greater cryptocurrency adoption, the advantage Pay It Now gives its users is provided by way of the independent layer-2 solution - zero gas and zero tax to pay. This gives Pay It Now commercial clients and their customers a built-in incentive most competing merchants and online retailers lack.
What do users do next after they get crypto in their digital wallet?
Once crypto is in a digital wallet or platform where it can be sent, received or used to make purchases, the next step is interaction. Every cryptocurrency moves on a specific blockchain. Only crypto on that blockchain can be sent and received into associated wallets which have specifications needed to access crypto moving upon its designated blockchain.
Ethereum network tokens are ERC20 tokens, meaning they are tied to the specific ETH blockchain network. The same is the case for Binance or BEP20, or the X-chain for Avalanche. Whatever the blockchain, the token must match. It is important to understand this in order to eliminate accidentally sending tokens onto the wrong blockchain, which most often leads to permanent token loss. Some payment processors possess checks built-in to the system and payment process to help safeguard users from this occurrence, however it is still beneficial for individuals to comprehend this concept of matching tokens onto the right blockchain for business and personal use.
The validation process and tips to help understand the blockchain better
Peer-to-peer blockchain networks depend on nodes on the network to validate transactions. This is how bitcoins and other cryptos are reconciled after being moved along its blockchain. Different validating systems are implemented by the various blockchain networks to reward validators who verify the transactions.
In the case of Bitcoin and Ethereum, proof-of-work validation uses the computing power of machines (nodes) to validate transactions that happen along the blockchain in exchange for small rewards received, charged in transactions as gas - a term popularized by the ether used on the ethereum network. Validators get a small portion of the bitcoins being validated on the network every time transactions are processed.
In the case of proof-of-stake validation, nodes are represented by holder wallets which are positioned as nodes and validate transactions based on the amount of tokens held and staked on the network, which keeps it powered through the internally built-in incentive mechanism. There are opportunities in some networks to become validators or delegators, who designate tokens to validators in order to leverage a percentage yield for tokens staked on the associated blockchain network.
The rise of crypto payment processing
As far back as 2011 wikileaks is documented to have begun accepting bitcoins as an accepted form of payment . Since that time, over a decade ago, droves of large corporations and small business owners alike have begun accepting crypto for payment. Any company desiring to stay competitive in the business landscape forming through our increasingly digital world, is no doubt working diligently to ensure blockchain compatibility for the company at the very least, which positions them to accept bitcoins and other cryptos for pay.
Bitcoin and digital payments are becoming an even hotter topic as of recent months, especially since the meteoric year of gains saw amongst many cryptocurrencies Q3 and Q4 of 2021 just last year. The crypto payments industry has been on the rise, and corporate heavyweights like Square Cash App, PayPal, AT&T, and several others are actively accepting Bitcoin and in some cases even establishing their own crypto payment gateways for cryptocurrency processing capabilities.
Crypto payments get increasingly popular
Bitcoin, Ethereum and other notable and even not so notable digital currencies in some cases, are becoming an increasingly preferred method of payment. Cryptocurrency payment processing capability is anticipated to almost become necessary for any large company, small business or brand to efficiently run its operations, keep existing customers and compete across industry lines.
The increasing development into the Web3 horizon is pushing all social interaction towards virtual reality integration, and we expect to soon see a world where it is normal for the masses to pay with bitcoin and other cryptos as primary payment methods. The crypto and broader digital payments industry was responsible for almost $4.7 trillion in transaction volume in 2021, and expected to reach $7.8 trillion this year.
Making it simple to pay with cryptocurrency online
A lot of current blockchain payment processing development is going towards making it simpler for businesses to accommodate customers paying with Bitcoin and other cryptocurrencies online and in-person. The majority of products and services are available today in some sort of virtual format, even if just the ordering process alone, giving platform users the option of paying for company offerings in crypto.
Every forward thinking company is looking to simplify this process of using Bitcoin and other cryptos to accommodate the growing digitally-aligned world in which we live and interact. The development of the web3.0 space required the integration of cryptocurrencies due to the digital nature of the processes and function of the space. Blockchain payment solutions provided by companies like Pay It Now are becoming increasingly sought after as the need for the processing capability continues to grow.
Will there be increased clarity in laws and regulations around cryptocurrency?
As various independent organizations and governments gather data and begin to get closer to making formal decisions on regulatory standards in cryptocurrency trade and exchange, each individual company in today’s landscape is adopting their own methods to account for and reconcile sales across digital and traditional methods in order to closely document business revenue.
In similar fashion, businesses like Pay It Now are keeping with what is known and can be seen as the best available business practices to adhere to while conducting business both on the ground and online. Many businesses decide to register in their jurisdictional territory as registered business in order to conduct business in accordance with the laws of the local government.
Since crypto does fluctuate, many individuals benefit from built-in reconciliation measures on crypto platforms and systems, much like Pay It Now’s processing system. These measures help business clients record profits that may be realized while holding digital assets, for obligations such as capital gains tax or other applicable financial regulations or tax requirements.
So how exactly are crypto payments made again?
We’ve went through the points surrounding crypto payments such as:
- How to use Bitcoin and crypto for payments in-person and online.
- What makes paying in cryptocurrency possible?
- What are cryptocurrencies?
- How to get set up for crypto payments?
- How to get your digital wallet set up.
Crypto payments have been explained as payments made using digital currencies like Bitcoin, Ethereum, and countless others traveling via support of the associated blockchain - the secure network upon which crypto is traded and transferred peer-to-peer, customer-to-company, vice versa, and company-to-company.
Crypto payments can be used nowadays in-person with merchants who possess virtual-based digital currency payment gateways integrated online via web3.0 parallel blockchain technology.
Bitcoin and other digital currency payments are expected to increase exponentially over the next several years, and now, more than ever, is the time for serious businesses to begin to get their payment systems integrated with blockchain payment processing methods as technology continues to clearly move in the direction of the digital space increasingly. Any company can continue to accept traditional payment methods like card and cash as long as desired, and simply add blockchain solutions to expand accepted methods and open the company’s earning potential by accepting the online and in-person crypto payment method.
Wrap up and conclusion
Any company or business that’s serious about competing in tomorrow’s landscape should at least take a long look at the payment processing landscape and research the facts and information to see the rising prevalence of bitcoin and other crypto coins and tokens being used as legal and preferred payment methods. Pay It Now is finalizing development of a gas free solution utilizing a layer-2 utility which will allow companies to get cryptocurrency for payment in exchange for products and services offered online and off.
Visit Pay It Now to see what we’re doing to offer innovative blockchain solutions for companies to accept Pay It Now Token ($PIN) and other popular cryptocurrencies. PIN is here to help companies bridge into the future and invite tomorrow into their corporate revenue streams today, as transaction volume in digital payment methods ramps up year after year.