What Is A Cryptocurrency?
A cryptocurrency is a new form of currency that is entirely digital as exists solely on its own network. Cryptocurrencies operate solely peer-to-peer, meaning that they are completely global and are not controlled by any sort of government. It is like virtual money that can be spent on items or services, or even exchanged for real cash.
How Are Cryptocurrencies Acquired?
James from cryptoclassroom.com explained that Cryptocurrencies are generated through a process called mining, computers are given extremely challenging hashing algorithms to decrypt. When a hash is decrypted, coins are generated. As more coins are generated, the problems to solve get even more challenging, making the influx of coins slower and slower. The process of solving the problem is often referred to as ‘finding blocks’.
Benefits for retailers?
There has been an increase in the number of retailers ready to accept alternative digital currencies, retailers need to take into account what is needed before investing.
Many major brands including Subway, Dell, Victoria’s secret have added this channel to consumer’s choice of payment options.
In February this year alternative currencies gained a substantial boot when the Daily Telegraph reported that the Bank of England could create digital currencies making the new system more available like bank notes already are. Private digital currencies like Bitcoin has shown that it is possible to transfer money securely.
The main benefit is cost. Digital payments can be made globally, instantly and at a lower cost compared with traditional transactions especially those outside of Europe. By offering another payment channel retailers can open the doors to an increase in customer acquisition. Users are able to manage and move money securely and instantly.
How does it work?
Zehra Chudry head of content for UK exhibition PayExpo explained that many stores use merchant solutions with contracts with hardware terminals at Point of Sale or via laptops, some use apps or QR codes linked to e-wallets which customers scan through their phones.
Diadem Jewellery in Altrincham accepts both Bitcoin online and in store using a payment platform called GoURL that creates a customer interface. A Customer wanting to pay by Bitcoin will have an application that functions as a digital wallet on their smartphone. At the till the merchant presents them with a QR code unique to the retailer’s account and it is then scanned.
The slow expansion of contactless payment is a good guide as issues are similar like building consumer and retailer confidence in its security. As it becomes more prevalent, greater government scrutiny and regulation will be enforced. Bitcoin has changed the way people think about digital money.