Problems Associated With Fiat Currency Payment - How Crypto Payment Tends To Solve These Problems
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Hello fam,
It is your favorite blogger @mato445 and I am happy to come before you all today again to share a useful cryptocurrency content.
Today, we shall be examining the problems associated with fiat currency payment and how crypto payment tends to solve those problems.
INTRODUCTION
Even in the future years, fiat currency payments would continue to be the most widely used. Even if cryptocurrencies are improving on many fronts, adoption is still progressing slowly, which keeps fiat money abundant. It is certain that at some point in the future, cryptocurrency will nearly entirely replace fiat currency, regardless of how far that point is off. However, fiat is in effect for now.
There are numerous problems with fiat currency payments since they rely on centralized entities. Crypto payment has already provided a simple and convenient solution to the problems associated with currency payments. Each and every person in the cryptocurrency field already benefits from these. This piece will discuss some of the problems with fiat payments and how cryptocurrency has addressed them. This will further clarify why the world ought to work toward adopting cryptocurrency payments as quickly as possible.
PROBLEMS WITH FIAT CURRENCY PAYMENT
Let us now examine a few of the problems posed by fiat currency payments.
SLOW TRANSACTION PROCESSING
The jet age is upon us. Nobody has the time to spent filling out paperwork in a bank for a straightforward cross-border money transfer.
Due to outdated technology, fiat transfers frequently take longer than expected. For instance, because many traditional bank networks continue to run on outdated hardware, they are frequently slow or subpar. Customers wind up spending far longer than necessary to finish a straightforward transaction as a result. Imagine having to spend days, not just hours, to finish a transaction that was dispensed incorrectly due to a bank network issue.
Fiat transactions typically take far longer to process, which frequently results in a bad customer experience.
TRANSACTION COST
Another problem with using fiat money to make payments is that it is very expensive to transfer money to another client or shift money from one account to another. particularly if it's a transaction with another country. Can you imagine paying 10% more than you intended to send to your brother or relative who lives abroad? One of the largest traditional fiat currency payment networks, PayPal, charges about 4% when making payments internationally.
Imagine paying 4% as fee and still have to wait for days before the transactions will be successful.
SECURITY AND PRIVACY
Many people now value privacy as a must due to the security conditions in many parts of the world. A growing number of identity theft cases that resulted in significant asset losses have caused users to be more cautious about their privacy. People used to feel at ease disclosing personal information to complete strangers some decades ago. However, everyone wants to know exactly with whom they are dealing these days. The problem with fiat payment is privacy, when two parties use fiat to run a transaction, a significant amount of personally identifiable information is left behind, which could be used by cybercriminals. For instance, a bank transfer using fiat currency reveals the payer's name, account and phone number. The user's privacy may be in jeopardy even after the transaction is finalized if their data is compromised by fraudster.
Fiat payment companies typically save their clients' sensitive personal information on centralized servers, which makes it easy for hackers to steal this information. Customers are exposed to several security and privacy risks as a result. These and numerous other instances illustrate how the usage of traditional currency payments jeopardizes user privacy, leaving them open to theft and loss of significant assets.
HOW CRYPTO PAYMENT SOLVED THOSE PROBLEMS
We have discussed the problems that comes with fiat currency payment, now let go on to talk about how crypto has been able to solve these problems.
TRANSACTION SPEED
Transactions involving cryptocurrencies are usually completed in a few seconds. There is no middleman to cause a delay in the transaction because the sender and recipient are interacting directly with each other. To do other activities, such as applying for a loan or making a transfer, you do not have to physically visit a bank location. On a blockchain, all of these transactions might be completed extremely quickly.
Cryptocurrency transactions may be completed at any time and from any location, which would accelerate them even further. For instance, any banking transactions that weren't finished on Friday would be postponed until Monday of the following week. Thus, an additional two days are lost as a result of the weekend. However, there are no weekends, holidays, or vacations when it comes to cryptocurrency transactions. Transactions can occur quickly and at any moment.
TRANSACTION COST
Cryptocurrency transactions can be sent or completed for little or no cost. One of the best things about using cryptocurrency for payments is that there is little to no processing fees. The cost of a transaction varies depending on the blockchain; some charge a little fee, while others don't even charge one. One excellent example of a cryptocurrency blockchain that processes transactions without charging a fee is STEEM. Staking or powering up your liquid Steem to Steem power will earn you Resource credits, which are needed to make payments on the STEEM Blockchain.
You don't pay a cost and it comes with quick speed, unlike when you have to pay a set percentage of your sending amount as a fee when dealing with fiat payment.
SECURITY AND PRIVACY
Through numerous features, cryptocurrency payments are designed to safeguard the privacy of persons involved in transactions. Crypto payments, for instance, can be P2P or direct. This omits the process's middlemen. Essentially, it also eliminates the chance that user data may be stolen and systems compromised by other parties. The privacy aspect is much improved with end-to-end payments, when the payer and payee are connected.
Blockchain transactions are frequently tracked using a cryptographic hash. Nothing personal can be inferred from this human-unintelligible string of characters. So, personally identifying information like an address or phone number is frequently missing when someone uses a blockchain explorer to examine a cryptocurrency transaction. The anonymity of cryptocurrency transactions is further enhanced by encryption technologies, which safeguard the parties involved in the transaction.
CONCLUSION
The aforementioned problems are only just a few of the numerous ones that cryptocurrency transactions have resolved pertaining to Fiat currency payments. For their everyday operations, many still rely on fiat. However, everyone should begin to think about the benefits of shifting to cryptocurrency for payments. They are faster and more secure. Additionally, cryptocurrency payments protects users privacy and cost little or zero fee.
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