Mechanism of Bitcoin as a Payment Service

Written by Ryan Green
3 mins, 4 secs Read
Published On July 25, 2022

Since 2017, the crypto market chart has been showing increasing returns. Even during the worst market period of COVID-19, while the other markets were on their bust, the value of the bitcoin was inclining. These crypto tokens are considered a unique discovery for trading and investing needs. You can sign up for to get started with bitcoin with the help of artificial intelligence and experts in cryptocurrency trading. However, even though the cryptocurrency market is growing, it is still not usable for an everyday consumer who doesn’t have any technical knowledge. 

Furthermore, the current infrastructural limitation of blockchain makes it hard for transactions in goods and services to be processed faster and smoother. Several issues need to be solved before cryptocurrencies become fully commercialized and adopted by the general public. Right now, cryptocurrencies cannot be universally used as a trustworthy payment method without the need for a bank or credit card company. 

To find a solution to these issues, the private sector is stepping forward to learn more about the value of blockchain technology and digital currencies. Like traditional banks and payment processors, they provide services that allow people to make secure transactions with fiat money and other digital currency. However, unlike conventional banks, centralized by authority (governmental or private), blockchain-based service providers have decentralization that promises greater privacy.   


How to Make a Payment with Cryptocurrency?

The primary purpose of cryptocurrency is to provide an alternative value system and make it an efficient payment method based on the proof-of-work and distributed ledger. In addition, services should be available to complete the transaction and use cryptocurrencies as a payment method. As for the initial period after their growth, many services were developed by developers for people who were interested in using cryptocurrencies. Some of them include:

Acquire a Crypto Token

It includes both selling and buying from cryptocurrency exchange platforms. In addition, people can acquire cryptocurrencies through mining. With mining, people can get rewards from crypto tokens for solving blocks in the blockchain. IoT technology makes it possible to conduct transactions using intelligent cryptocurrency devices. 

People can also use a smartphone to receive crypto payments when paying for goods at local shops or restaurants through crypto credit card apps such as BitPay or Fold App. Another option is to buy cryptocurrencies from traders or exchange platforms. The most popular exchanges include Binance, Bitstamp, and Kraken. It includes selling and buying tokens of an upcoming company yet to be launched.

Choose a wallet

Cryptocurrency wallets are banks that allow you to hold, trade, and transact digital currency. Because of this, you should follow the same rules when choosing a wallet as security measures in online business banking services. In addition, your wallet should be reliable and safe to prevent losing your coins by accident or from external attacks. To ensure that your cryptocurrency is secure, ensure that it is configured with the required security features. 

It allows people to manage their cryptographic keys and private data, which means you only have to trust yourself. However, it also means that you can only use this option if you are a high-end internet user familiar with technology and consider yourself trustworthy.

Send and Receive a Payment

It is the process of transferring crypto tokens from one wallet to another. For example, if you make an online purchase using bitcoin, the payment will be processed automatically without requiring you to cancel or check your credit card information. Once you have acquired a cryptocurrency wallet and learned how to use it, there are several other processes you need to know before using crypto tokens as a payment method. 

With cryptocurrency, you should ensure that you only use it in a trustworthy business. The transaction must be processed through a reliable company, and they should show the same attitude as your online payment service provider. You also must ensure that your business functions as one and has no ill intentions, such as scamming other customers or stealing their coins through phishing or hacking. Finally, cryptocurrencies are a new form of payment, and you should still be cautious not to fall victim to any scam. While traditional banks have been around for a long time, innovations in blockchain technology such as ICOs and smart contracts are constantly improving their services. In the final step of this process, ensure that you keep your crypto tokens safe before becoming a victim of fraudulent operations. It is also advised to use different passwords for your cryptocurrency wallets and make sure to encrypt them with a strong password.

Author: Ryan Green