Whether you’re buying a car, paying a contractor or even sending money to a loved one as a birthday gift, making peer to peer payments is something we all need to do from time to time. In days gone by, cash was king, but in recent years, the world has become a more interconnected place. A fashionista might buy designer clothes from a seller in another state. A web designer might buy digital content from a copywriter in another country. The birthday boy or girl might be thousands of miles away.
There are numerous choices for making such transactions, including bank wire transfers and digital platforms like PayPal and Cashapp. However, each has its own shortcomings, including time, cost or security. Over recent years, many have chosen to use cryptocurrencies for peer-to-peer transactions.
Not just for casino gaming
Mention crypto and minds tend to go in one of two directions. Either trading for a quick profit on the crypto exchanges or trying your luck at an online casino. Both should be treated with caution and there are no guarantees. However, as the independent reviewers at the Gambling Sites website point out, if you intend to gamble at an online casino in the US, there are good reasons to do so with bitcoin or an altcoin – see www.gamblingsites.com/banking/cryptocurrency/ for the full story.
But is there a third use case for crypto in our everyday lives? A handful of businesses accept digital currency for retail sales, but there is still a sense of gimmickry to it. When it comes to peer-to-peer payments, however, it is another story.
Benefits of using crypto for peer-to-peer transactions
There are numerous advantages sending remittances to friends, vendors or business partners using cryptocurrency.
– Negligible transaction fees
One of the most famous crypto transactions ever involved a peer-to-peer remittance by Litecoin in 2018. The sum involved was a cool $99 million and the transaction fee was less than a dollar. You might wonder how that is possible. The point is, other methods involve third parties who have bills to pay like anyone else and will charge a fee. With crypto, peer-to-peer means exactly that – no middle man, and practically no costs.
– Instant transactions
Send money by bank wire transfer and you can expect it to take several days. Have a guess how long that $99 million transfer took to complete. If you said three minutes, you would be about right. Regardless of the distance between the parties or the sum involved, it is just so many zeros and ones as far as digital networks are concerned. As cryptocurrency transactions are processed using decentralized networks, there are none of the processing delays associated with intermediaries.
– Complete transparency and trust
Every crypto transaction is recorded in the digital equivalent of indelible ink on public ledgers. Anyone can trace the flow of funds and it is next to impossible to tamper with the ledger. It gives parties the confidence to trust one another, as it is practically impossible to commit fraud.
– Universal access, wherever you are
The digital world is borderless. That can present challenges for lawmakers, but for the rest of us it means freedom. If you want to send you brother some money on his birthday by crypto, his physical location is irrelevant. He could be in the next room or on a different continent exploring the most remote corner of the earth. As soon as he is able to get online, he will see the funds safely there in his digital wallet.
What about the risks?
There are pros and cons to everything, and that includes peer-to-peer crypto transactions. Exchanging fiat for crypto in the first place can incur costs and the risk associated with price volatility is ever-present and cannot be overlooked.
Furthermore, there are plenty of fraudsters and scammers on the periphery of the crypto scene, praying on the unwary. But provided you keep your wits about you, it is hard to argue against the benefits of using crypto for peer-to-peer transactions.