In the 21st century, cash is no longer confined to bills, coins and credit cards. In fact, some money is really international — not owned by any particular government — and regulated “by the people” instead of a central entity. Additionally, it exists wholly online. This type of money is known as cryptocurrency.
You might have heard of or even used Bitcoin when it first became popular many decades ago, but where Bitcoin used to rule, other cryptocurrencies are now being used to pay back family members for lunch, charge customers for products and services and make other everyday transactions. As an entrepreneur, it’s important to keep an eye on the most commonly-used cryptocurrencies. Here are six I think you ought to know about.
As opposed to competing with Bitcoin like many other cryptocurrencies, Ethereum complements it; where the Bitcoin network tracks ownership of its own money, the Ethereum runs programming codes for its users’ applications. People today use Ethereum to make custom (but reliable) crowdfunding platforms, autonomous online organisations and even their own cryptocurrencies. Because these applications are decentralised, they can only be built in the Ethereum network.
Ether, the system’s money, wasn’t made to be used for everyday payments, however anything of value can be traded for products and services; as a result, many developers use it to cover one another’s help in building applications.
However, most online shops that accept cryptocurrency don’t take Ether.
If Bitcoin were gold, Litecoin would be silver. Litecoin works the same as its more popular counterpart, but it’s worth a little less — there are 21 million total Bitcoin in life and 84 million Litecoin. Litecoin are easier to mine and quicker to move from person to person due to its faster block creation. It is possibly the least intimidating cryptocurrency for those who are new to exchanging money on the internet: Litecoin’s wallet can be downloaded from the official Litecoin website, which is fully encrypted to prevent accidental spending and computer viruses. This is a super simple network for people who need to move smaller amounts of money fast.
Though other cryptocurrencies avoid banks, Ripple adopts them. In actuality, Ripple was made for banks, as it enables them to make faster, low-cost, on-demand global payments of any dimension. Traditional cross-border trades require banks to go through an intermediary (or often several), which delays completion. Ripple offers a faster and more direct choice. When a bank customer in the US wants to send a payment to another bank client in China, Ripple immediately queries both banks for their transaction fees and makes the move in a few minutes. It even updates both customers’ ledgers right away so that they can view their accounts following the trade. This cryptocurrency allows lenders to offer new payment options, simplifying the transaction process for consumers worldwide.
Why are these so important?
If your business does not use any of these cryptocurrencies already, you may want to start incorporating them soon.
Cryptocurrency transactions aren’t validated by an entity, meaning there are no bank or platform fees associated. You also don’t have to wait nearly as long to receive cryptocurrency as possible with traditional money.
Again, a cryptocurrency’s main feature might be that it’s truly international; no particular government owns or regulates it. This means there are no fees for payments that cross borders, and the trade works the same regardless of where you or the other party are located.
The only major drawback to cryptocurrency is the requirement to sell it for USD (or some other government currency). However, this process closely imitates how you’d transfer PayPal funds to your checking account.