Overview of cryptocurrencies suitable as a means of payment
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There are thousands of different coins, tokens and cryptocurrencies. Which cryptocurrency is eligible as a means of payment was explained in the article”Which cryptocurrency should I accept in my shop?“
Which cryptocurrency is suitable as a means of payment depends on factors such as target group or business model. Also whether the cryptocurrency as a means of payment in an online shop or in the retail store was explained which cryptocurrency is suitable as a payment method in your own internet shop or in the retail store.
In the following article, the most important cryptocurrencies are presented in more detail as a means of payment. It is about specific characteristics and peculiarities. Which cryptocurrencies are particularly suitable for which business model or customer target group.
In 2009, Bitcoin was developed as a “Peer-to-Peer Electronic Cash System”.
The idea behind it is a digital payment system (Electronic Cash System) with the help of which payments can be made directly among each other (peer-to-peer).
Critics of Bitcoin see some disadvantages for payment processing and other crypto-currencies have developed which try to remedy these disadvantages.
Some Bitcoiners also no longer see Bitcoin as a means of payment (medium of exchange), but see it as a store of value and refer to it as digital gold.
For the followers of the store of value approach, Bitcoin is an investment in the future and tends to hold Bitcoin (hodl) and not spend it.
But what is the criticism of Bitcoin as a means of payment?
The main criticisms are the high costs of a transaction and the long transaction duration.
With Bitcoin, every 10 minutes the transactions made are written in a block and confirmed.
Due to the block cycle, the confirmation of a transaction can take from 10 minutes to several hours, depending on the amount of the transaction fee paid by the payer.
Accordingly, Bitcoin payments may be unsuitable for business models where immediate confirmation is required. An example is the purchase of a coffee in which a shopkeeper does not want to wait 10 minutes for the goods to be handed over.
There are solutions for such instant payments. Thus, the goods can be handed over to the customer as early as the transaction is started in the mempool.
On the other hand, for high-value and expensive goods, it is advisable to wait for the corresponding confirmations in the block chain.
Corresponding settings are made when configuring the payment process with the payment provider.
Another point of criticism is the high transaction fees for the payers. These high fees are due to the fact that the space of the transaction in the next block is purchased as in an auction. If there is a high volume of transactions and space becomes scarce, the fees increase.
To solve this problem, it was discussed to increase the block size and to reduce or combine the size of the individual transactions.
The supporters of the idea of enlarging the blocks implement this in new crypto currencies like Bitcoin Cash or Bitcoin SV.
In the case of Bitcoin, the block was enlarged and the transaction size optimized within the framework of SegWit. This has led to a significant reduction in transaction fees and is currently at a level of a few cents per transaction.
Since every transaction on the block chain (on-chain) causes a transaction fee, Lightning has developed a transaction solution in which transactions do not have to be recorded on the block chain (off-chain).
The original criticisms have been technically resolved and therefore do not constitute an obstacle to accepting Bitcoin payments.
In recent years, Bitcoin has established itself as the most robust, reliable and important payment method.
Bitcoin is the world’s most popular digital currency, so Bitcoin is no alternative as a payment method and therefore belongs in every shop that offers cryptocurrencies to its customers.
At Coinpages you will find all German-speaking merchants who accept Bitcoin.
Lightning is not another crypto currency, but a new function for payment with Bitcoin.
With the success of Bitcoin and the resulting increase in Bitcoin transactions, three problems became apparent:
(1) Bitcoin can only process about 7 transactions per second due to the block size limitation, (2) the cost of a transaction increases and (3) the confirmation of a transaction can take 10 minutes or more.
These drawbacks are solved with lightning.
Bitcoin Lightning is the technology that allows Bitcoin payments to be made faster, easier and cheaper than directly via Bitcoin.
In a Bitcoin payment, every single transaction is written to the block chain (on-chain) and documented there for all the world for eternity.
If two parties make payments between themselves, it is not necessary for each of these transactions to be individually recorded in the block chain. These transactions are recorded separately (off-chain) from the actual block chain. The intermediate transactions are documented as lightning transactions in a sidechain.
The opening and closing balances of the Lightning transactions are recorded and closed on the block chain.
With Lightning, payments can be confirmed in seconds and transaction fees are reduced to a few Satoshi.
Thanks to Lightning, the original Bitcoin idea can be optimized.
Payments can be sent and received anonymously, almost for free worldwide, over the Internet.
Especially for the payment of newspaper articles behind so-called paywalls, payment processing via Lightning is predestined.
When choosing the right cryptocurrency as a means of payment for products and services with a few cents to a few euros, you can’t do without the payment of Lightning.
At Coinpages you will find all German-speaking merchants who accept Bitcoin Lightning.
Bitcoin Cash (BCH)
The currency Bitcoin Cash has been on the market since summer 2017. Due to a different view on the optimal block size, the trailers of large blocks were split off from Bitcoin.
Under the name Bitcoin Cash, the supporters of the Large Blocks gathered to process more transactions in one block.
The pioneer Bitcoin allows “only” a maximum of seven purchases or sales per second. Bitcoin Cash should make eight times more transactions possible – in the same time.
One of the key people behind Bitcoin Cash is Roger Ver. He is one of the first investors in various bitcoin companies.
Bitcoin Cash sees itself as the only true Bitcoin and confuses numerous newcomers through the well-known website bitcoin.com.
Bitcoin Cash advertises that it is not only intended for speculation, but as an electronic peer-to-peer currency. It should be used accordingly, or in other words: it should be output.
With Bitcoin Cash, payments can be made quickly because transactions are credited almost immediately. Bitcoin Cash payments cost only a few cents, regardless of amount and size.
For Bitcoin Cash, numerous payment providers offer payment processing for online shops. For brick-and-mortar stores, there are mobile apps that turn a smartphone into a POS terminal.
The spread of Bitcoin Cash is still very manageable among traders in the DACH region.
Bitcoin Cash is a cryptocurrency suitable as a means of payment by its technical characteristics. The disadvantage is the low distribution in the DACH region. In Australia and the Pacific, this cryptocurrency is being used more widely as a means of payment.
At Coinpages you will find all German-speaking merchants who accept Bitcoin Cash.
Bitcoin SV (BSV)
Bitcoin SV is a spin-off from Bitcoin Cash. The suffix SV stands for Satoshi Vision and is intended to indicate a commitment to the original vision of Satoshi Nakamoto.
The original name was Bitcoin Cash SV, now the common name is Bitcoin SV.
The inventor of Bitcoin Satoshi Vision is Craig Wright. He describes BitcoinSV as the true Bitcoin, and he himself is the mysterious Bitcoin inventor Satoshi Nakamoto.
With Bitcoin SV, unlike Bitcoin, the block size is not limited. Thus the number of transactions is not limited and thus the scaling problem should be solved.
Bitcoin SV offers the possibility of splitting payments. So it can be said that when a payment is made, a partial amount is sent to another address. For example, commissions or fees can be transferred to separate accounts.
The use of the so-called Moneybutton is recommended for payment processing. With this application it is very easy to integrate the payment function into your own shop.
Mainly customers from Russia and Asia use Bitcoin SV for payment.
Bitcoin SV is hardly common among traders in the DACH region. Only a trader at coinpages accepts this cryptocurrency as a means of payment.
At Coinpages you will find all German-speaking merchants who accept Bitcoin SV.
The second most important crypto currency by market capitalisation and the main competitor of Bitcoin is ether from Ethereum.
The technology created in 2013 by the then 19-year-old Vitalik Buterin is also based on block chain, but is more powerful than Bitcoin’s technology and able to execute smart contracts itself.
Ethereum thus pursues a different goal: It is less about paying with ether, but rather about building entire organizations on an electronic, decentralized basis.
Ethereum is considered less suitable for pure payment, yet numerous shops offer payment by ether.
The technical advantages of Ethereum are not in the processing of payments. Nevertheless, the second most important cryptocurrency enjoys a large spread. Thanks to the widespread use among potential customers, this cryptocurrency should be shortlisted as a means of payment.
At Coinpages you will find all German-speaking merchants who accept Ethereum.
Ripple is a payment system for companies, banks and payment institutions. Ripple’s solution is not suitable for payment processing between individuals and companies. Therefore, this cryptocurrency is not considered as a means of payment here.
At Coinpages you will find all German-speaking merchants who accept Ripple-XRP.
Litecoin was released on 07 October 2011 and is one of the oldest crypto currencies besides Bitcoin.
Litecoin describes itself as “The Cryptocurrency for payments” and as a peer-to-peer Internet currency that allows you to send payments to any person worldwide in real time and almost free of charge.
Technically, Litecoin is almost identical to Bitcoin. Litecoin also likes to talk about Bitcoin’s little brother.
Like Bitcoin, a maximum of 21 million Litecoins can be produced and is divided into 100,000 units.
The only technical difference is that a block is not verified every 10 minutes, but already every 2.5 minutes. This allows a transaction to be confirmed more quickly.
The special features of Litecoin are faster transaction times and improved storage efficiency.
Litecoin enjoys extensive support in commerce, as well as significant trading volume and liquidity. Thus, Litecoin is often used as a supplement to Bitcoin.
At Coinpages you will find all German-speaking merchants who accept Litecoin.
Monero (XMR) has a strong focus on privacy (anonymity) and decentralization and takes a different approach to scalability.
Transactions are confirmed after about 2 minutes.
The special feature of Monero is its anonymity and data protection. To ensure anonymity, ring signatures and stealth addresses are used.
Stealth addresses mean that the addresses for incoming and outgoing payments are not publicly visible. This is only possible with the private key, which the owner can publish or pass on.
The ring signature disguises and mixes the transactions, making it impossible to trace the money flows by analyzing the block chain.
When paying with Monero, the payee cannot see what other payments you have made. It is also not possible to determine which credit balance is available.
Transactions on the Monero block chain cannot be linked to persons or identities.
Monero sees itself as a “private digital currency” and the money for a connected world. It is fast, private and safe.
Monero is a popular cryptocurrency as a means of payment for very tech-savvy customers who place a lot of emphasis on anonymity. This means that it is more suitable for digital goods where a customer does not have to disclose his or her personal shipping address.
At Coinpages you will find all German-speaking merchants who accept Monero.
The name Dash stands for Digital Cash.
The most important characteristics of cash are its speed, low transaction fees and anonymity in every single payment transaction.
Dash offers the two main functions InstandSend and PrivateSend.
InstantSend is the fast, guaranteed payment within 1-4 seconds. This makes Dash perfect for retail and direct payments – it works like decentralized digital cash.
With the PrivateSend function, Dash protects private payment transactions and corporate payments through decentralized merging. As a result, transactions are mixed up and thus concealed and the payment is anonymous to third parties.
Both methods can optionally be used for particularly fast transactions (InstantSend) or anonymous transactions (PrivateSend).
With intensive public relations work, Dash has increased its awareness in the DACH region. Numerous payment providers, Bitcoin ATM and POS terminal solutions have integrated Dash as a payment method.
Dash is a cryptocurrency well suited as a means of payment.
At Coinpages you will find all German-speakingmerchants who accept Dash.
Recommended cryptocurrency as a means of payment:
Merchants who want to offer other cryptocurrencies as a means of payment in addition to Bitcoin should shortlist the following cryptocurrencies:
This post is also available in: German