What are cryptocurrencies?

Let's start with the simplest and most fundamental question: What are cryptocurrencies actually? The term encompasses a variety of digital currencies such as Bitcoin, Ethereum, or Ripple, which are limited in number and — just like traditional currency made of metal and paper — can be exchanged. However, there is a crucial difference to classical currencies that makes them so interesting — even for your customers: cryptocurrencies are not yet under the control of major financial institutions or governments.

How do cryptocurrencies work?

But how does it all work? Generally, Bitcoins and Co. are somewhat similar to the money in a bank account. Only, in case of doubt, you couldn't just withdraw it from an ATM. Trading with cryptocurrencies takes place exclusively virtually. This is very convenient and always possible for your clientele, anywhere!

Cryptocurrencies do not exist physically at a bank, but they also do not require one for trading. Transactions take place solely on the blockchain. This is the name of the system of the financial service provider of the same name on which the virtual trading of cryptocurrencies is based — comparable to the online banking of a credit institution where customers can transfer money.

Interaction of cryptocurrencies and blockchain

In the blockchain, the digital cryptocurrencies are stored, assigned to users, and transactions are documented. One of the top arguments for users of cryptocurrencies: Everything is visible and can always be easily traced. So, also a top argument for you towards your clientele. To participate, one must first pour "real" money into the crypto system in a coin exchange to exchange it for, e.g., BTC or ETH.

The personal crypto wallet

Those who have taken this step will find the first units of their chosen cryptocurrency in their personal crypto wallet (= wallet) and can trade with it. The wallet is comparable to a bank account. It is essentially a code that is individually assigned and corresponds to an account number. In the wallet, one can view their digital currencies and trade with cryptocurrencies. All one needs to send cryptocurrencies around the world within seconds is the wallet address of the recipient.

Who uses cryptocurrencies?

If you're now wondering which of your clients you can offer this concept of trading with virtual online currency to, it's now all those who are interested in progressive financial solutions or want to have part of their wealth outside the banking system. While cryptocurrencies were initially more of a playground for speculators with an online affinity and a lot of "play money" that could also greatly increase, over time, a broader mass has discovered this method of trading and investment for themselves.

Digital currencies can be interesting for everyone

The sector they come from hardly matters anymore today. Therefore, you can also view cryptocurrencies as an attractive idea as part of your services because a lot of people are interested in them. And with our small guide here, you can also convince beginners of the idea.

Anyone who still has concerns, for example, whether money is securely invested in a cryptocurrency or whether the system has security gaps, will certainly find good answers here:

The disadvantages of cryptocurrencies:

• Cryptocurrencies do not have the best reputation, although they actually operate on a fully transparent system.

• The methodology is still under development — which also promises a lot of progress.

• Bitcoin and Co. can be subject to significant price fluctuations and are not yet a universally accepted means of payment.

The advantages of cryptocurrencies:

• The greatest advantage for your clients is the independence of cryptocurrencies from financial institutions.

• Sellers and buyers enter directly into a business relationship — which takes less time and fees.

• Users have no limits and can sell all bitcoins at once if needed.

• Cryptocurrencies are limited in number, in the case of bitcoins to 21 million. No bank can therefore mint currency, and the exchange rate is stabilised by the users themselves.

• Through the blockchain, cryptocurrencies are transparent and therefore secure.

• Usage is anonymous (only through the ID code) and possible worldwide without barriers.

What opportunities do cryptocurrencies offer with Payrexx?

These are all advantages that your customers can enjoy when using cryptocurrencies as a payment method. And what advantages arise for you when you use Payrexx in this context? We cooperate with external payment providers Coinbase and Utrust, through which users can integrate cryptocurrencies. With Coinbase, the volatility risk can be circumvented by directly accepting stable coins as payment. With Utrust, received cryptocurrencies can be directly converted into, e.g., EUR in the wallet to likewise avoid the volatility risk.

All in all, a worthwhile package for all parties involved!

The parallel connection of Coinbase, Utrust, as well as over 45 payment providers is possible with Payrexx with just a few clicks. We are happy to advise you in a free, personal conversation to show you all your opportunities and chances for your business.