Crypto Payments: Pros and Cons

Paying with cryptocurrency is no longer surprising—more and more stores and services are accepting coins and tokens, and some companies even pay salaries in them. In this article, we will explore the pros and cons of using cryptocurrency as a means of payment compared to traditional fiat currency.

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Crypto as Money

When it comes to online payments, crypto is almost no different from fiat. In the first case, you use an electronic wallet address, and in the latter, a bank card number.

To make a payment with cryptocurrency online or offline, you need to enter the recipient's crypto wallet address, the transfer amount, and sometimes the fee amount (to speed up the process, most services offer to scan a QR code). The transaction speed depends on the blockchain network. In the Bitcoin network, it can take about 20 minutes, while in the Ethereum network (ERC-20), it takes between 30 seconds to 2.5 minutes.

There are no technical restrictions on paying with cryptocurrency; the restrictions arise at the legislative level. Cryptocurrency is only allowed as a means of payment in some countries, such as Japan, Singapore, and Estonia. In most countries, like Russia, Israel, and Thailand, it is recognized as property, meaning it can be bought and sold but not used as "money." There is also a third category of countries where crypto is completely banned: Nepal, Indonesia, Bangladesh, etc. However, despite the bans, cryptocurrency is in use almost everywhere today. Firstly, because transactions in it are anonymous and participants are difficult to trace. Secondly, the penalties for using crypto are usually not severe. For example, Bangladesh and Indonesia, where cryptocurrency is banned, are in the top 20 of the Global Crypto Adoption Index.

Advantages of Cryptocurrencies

Let's discuss why, despite the bans, paying with cryptocurrency is becoming more and more popular.

  • Global Reach: Cryptocurrency simplifies international payments—transactions are fast and without intermediaries at any time of the day. This is especially relevant when the countries involved have incompatible payment systems or if a country is under sanctions.

  • High Privacy: Receiving fiat on bank cards always reveals your identity, as the surname is displayed during transfers, and when registering a card, the bank requests all your data (making it easy to trace you if needed). Discovering personal data when dealing with cryptocurrency is very challenging and often practically impossible.

To be fair, fiat also offers high privacy but only when using cash. However, cash is used less and less in the modern world.

  • High Security: Cryptocurrency transactions are protected by encryption, making them impossible to forge: each block contains information about the two adjacent ones, and any change will cause a change throughout the chain.

  • Low Fees, with some networks allowing users to set their fees. Unlike banks, where profit from fees goes to specific individuals or a limited group, in blockchain, the reward goes to users verifying transactions.

  • Transparency: Despite the high level of privacy, all transactions are fully transparent and easily traceable using various explorer services.

  • Low Risk of Blocking: If the wallet does not belong to an exchange or another centralized platform, it cannot be blocked. This is because the system is decentralized, and there is no control over it.

  • Independence: Cryptocurrency is independent of any state or regulator. The rate is determined purely by market conditions: supply and demand. Inflation is regulated by limited emission, and in some blockchains, like BNB Chain, by burning coins.

Disadvantages of Cryptocurrency Payments

At the same time, cryptocurrencies have certain drawbacks that need to be considered.

  • Exchange Rate Volatility: Since cryptocurrency is not regulated, its rate fluctuates significantly. A striking example is Bitcoin, which cost more than $20,000 in 2017, fell to around $5,000-8,000 by 2020, then rose to $60,000-65,000 a year later, and dropped again. The value of a coin can rise by several hundred dollars and fall sharply in just one day. For this reason, stablecoins with a constant rate are usually used for payments.

  • No Legal Recognition: This issue has been discussed above.

  • Personal Responsibility for Security: Unlike banks, where incorrect fiat transfers or account theft can be refunded, in blockchain, refunds are impossible. Once a transaction is initiated, it cannot be canceled or stopped. Also, if using a non-custodial wallet, you are responsible for the security of your private keys—if lost, access cannot be restored.

Prospects of Crypto as a Payment Method

Cryptocurrency cannot replace fiat because it exists solely in the digital world—if there's no internet, you can't access it. However, using it as an additional payment method is viable, and many companies are already adopting it, allowing them to expand to international markets and grow their customer base.
If you want to start accepting crypto payments, we recommend BucksBus as your payment service—it's a secure solution with the industry's lowest fees.

Key advantages of BucksBus:

  • Lowest fees in the industry: only $0.7 per transaction or $250 per month.

  • High reliability: crypto goes directly from the customer's wallet to your non-custodial wallet. You get a seed phrase and full control over your funds.

  • No KYC/KYB: registration only requires an email address.

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