Years ago Satoshi Nakamoto imagined an ecosystem that would be independent of the centralized financial system that dominates the world economy today. His creation sparked a global community of enthusiasts and an entire industry around the Blockchain – the solution that allows individuals to turn their money away from centralized legacy institutions and toward transaction in a decentralized and distributed ledger. The ultimate goal was a world in which people could pay for goods and services with these novel financial instruments.
Many payment and exchange companies already claim to offer services that allow crypto currency users to purchase goods and services with crypto currency. However, after a more detailed analysis -as in the case of Binance’s new debit card offering- it is clear that their payment solutions in cryptomonies do not comply with the Blockchain, which adds more intermediaries and opens users to the same prejudices they could suffer digitally with traditional payment methods.
How does the process of a payment in cryptosystems work
Currently, there are two main methods for processing a cryptomoney-fiat transaction. One method is for the intermediary to accept the cryptomoney and convert it to fiat at a closed, instantaneous exchange rate, and then deliver the fiat to the merchant or vice versa. The second method is to first settle the user’s fiat currency in the user’s account before it reaches the intermediary and then send the fiat payment to the intermediary to complete the transaction. The first method takes place in the Blockchain, while the second does not.
Many payment platforms offer one of the two types of transactions mentioned. Even the giants are thinking about getting into the game. PayPal has recently considered the idea of offering payments in crypto-currency to consumers, which could open the way to further stabilization of the volatility often associated with Cryptosoft and other cryptosystems. But it remains to be seen exactly how these payment providers plan to process transactions – whether they would technically allow consumers to pay in crypto or fiat in or out of the Blockchain. That’s an important difference for crypto coin users.