Cryptocurrencies are there to disrupt the existing financial order. You’ve probably read sentences similar to the previous one dozens of times if you own a cryptocurrency and engaged in activities such as Bitcoin trading. It’s uncertain whether they have the power to change to the world around us, but it’s definitely certain that they can improve certain aspects of our lives, the most important one is online purchases.
If you like buying things online, you know that the safety and security of online transactions need to be as great as possible. Failing to make an online transaction safe can result in various things, including having your money or identity stolen. Luckily, cryptocurrencies prevent these things in several ways, so let’s take a look at how safety actually works when you buy things with BTC or other cryptos.
Table of Contents
Private Key Keeps Your Cryptocurrencies Safely Stored
The first thing that sets cryptocurrencies apart from other payment methods is that they cannot be hacked as long as they are safely stored in your crypto wallet. Right now, you’re probably thinking — “of course I will remember it, I do the same thing for my bank account and e-wallets. What’s the difference?”
If a cybercriminal attacks and penetrates your bank, they will be able to steal your money as they entered the system of a centralized body that keeps your money. That’s not possible with using e-wallets, as there are no centralized organizations – everything is on the blockchain.
Therefore, just make sure that your private key doesn’t fall into the wrong hands. There’s just one thing that you need to do to make them 100% safe, and that’s to remember your private key, which is essentially your password for accessing your wallet. If you forget your Facebook password, you can retrieve it by contacting Facebook and making a new password. Such an option is not available here. You lose your private key and your money is gone forever.
Cryptocurrencies Are Encrypted
Cryptocurrencies are safe because they are encrypted. Crypto transactions use various cryptography methods, which makes them virtually impenetrable. We’re not going to discuss how cryptography works here, as it would take a lot of time. The only thing you need to remember is that cryptography does a wonderful job of making your transactions impenetrable by hackers.
Cryptocurrencies Are Anonymous
When making a cryptocurrency purchase, you don’t have to provide any data about you, which is not the case with other payment methods. Simply put, e-wallets don’t ask your name or any other document to confirm your identity.
Now, anonymity is a double-edged sword when it comes to cryptocurrencies. Remaining anonymous when paying can help you control how much the Internet knows about you. But most of the services you’ll use when making crypto purchases are regulated, meaning you’ll not have to worry about them misusing your info.
Moreover, many services, such as centralized cryptocurrency exchanges, require you to go through their KYC protocol, where you have to leave some of your personal data. That way your wallet can be traced through your account, so cryptocurrencies aren’t 100% anonymous as long as you’re using official services.
Nevertheless, it’s still much more anonymous than other payment methods, which’s a huge advantage.
Cryptocurrency Transactions are Peer-to-Peer
Whenever you use a centralized banking method to make an online purchase, at least three sides are involved – you, the seller, and the bank (or e-wallet, or any other centralized body that must confirm the transaction). Simply put, when you send a purchase request, your bank needs to review it and then complete the request with the seller. That’s plenty of unnecessary steps, and each one can compromise your safety if something goes wrong.
This is not important when making a purchase using a cryptocurrency. Simply put, you’ll have to enter a crypto address of the seller and send the money directly to them, with no intermediaries blocking the way. By creating a successful peer-to-peer transaction, there’s less room for cyberattacks to occur. Therefore, it’s one of the main reasons why cryptocurrencies have been gaining popularity lately.
Other Benefits of Purchasing with Cryptocurrencies
Safety and security are not the only things that cryptocurrencies made better in the world of digital money transactions. Many use this payment method because it offers other convenient features in addition to safety and security.
The most important one is that cryptocurrency transactions are fast. Some cryptos, such as BTC, might be a bit slower than credit cards or e-wallets, meaning transactions can take up to several minutes to be processed, as opposed to some instant methods. You’re probably thinking – “but that’s not fast if it’s slower than cards and e-wallets!” But it’s cheaper. A lot cheaper.
Fees charged by Bitcoin and other cryptocurrencies are much smaller compared to other payment methods, especially bank transfers and e-wallets.
Downsides of Crypto Purchases
What many still regard as the biggest downside of cryptocurrencies is their volatility. Simply put, the worth of cryptos often changes, and prices sometimes oscillate a lot, especially when it comes to Bitcoin. In other words, a single Bitcoin can be worth hundreds of dollars more or less within a single day.
That happens because cryptocurrencies are still young and the technology behind them is unexplored. Many other factors affect the price of cryptocurrencies, with hype being a dominant one. This can sometimes be an obstacle for making online purchases, especially if you have to pay more than you expected. On the other hand, many cryptocurrency traders know how to profit from these frequent changes.
Conclusion
To sum up, cryptocurrencies are faster than most of the payment options and more affordable. Yet, safety and security are the two most important features of this type of money. When all three of these things are combined, cryptos are definitely a valid contender for the throne for the most popular payment method on the web. However, there are certain challenges that cryptos need to overcome too. Luckily, some of the brightest minds in the world are working on them.