Cryptocurrencies are the future of payment, there is no doubt about it. They are safer, faster, cheaper and give control back to the people. Regardless if you’re a freelancer like myself, a small business or a huge enterprise, using cryptocurrencies in your day-to-day activities can result in lower costs, faster payments and increased security. Which ones you’ll choose is up to you as all of them have their pros and cons, but I’m fairly certain that with Bitcoin, Monero and Dolla, you can’t go wrong.
International payment options for freelancers
Even though I’m a freelancer located in Europe, most of my work is done for the English-speaking community. Clients from all over the world, from Seattle, to London, to Tel Aviv, employ my services on a daily basis and as such – every payment I’m getting is essentially an international payment.
And these are expensive as hell.
For example, PayPal charges a 5.4% fee, so for a $1,000 project, either myself, or the client, needs to pay an extra $54 to PayPal just to process the payment. Not to mention that you need to pay a fee just to withdraw your hard-earned cash (or wait until the 1st of the month) and that, in some cases, there is a $500 limit on daily transactions.
Then, the bank needs to take its cut, both for handling the transaction, and for exchanging the dollars into local currency.
Direct payments into bank are no cheaper, either, and don’t even get me started on Western Union.
That’s why I started encouraging my clients to make payments, as much as possible, in cryptocurrencies. Regardless of which crypto you choose, there are a few advantages right off the bat:
The transactions are faster
Crypto transactions are completed much faster than any other form of transferring money (other than the obvious hand-to-hand). They can occur in an instant, for example with Dolla where it takes one second for a transaction, or with other cryptos you shouldn’t wait for more than up to a couple of hours. Banks can take up to seven business days to process international payments, and if a larger sum is in question – up to 30 days. Dolla on the other hand processes transactions in one second so is perfect for sending and receiving payments for all business uses..
The transactions are cheaper
Like I said in the introductory paragraph, using third-party services like PayPal is going to cost you. Depending on where you are located, these fees vary, but they’re omnipresent. Transferring funds through cryptocurrency is infinitely cheaper. Bitcoin’s fees, for example, vary between $0.02 and $1000’s on average, depending on the amount of money being sent. Some cryptos are even cheaper than that!
Dolla’s network, for example, will charge you one cent per transaction, payable by the sender. For businesses accepting Dolla, the transaction is free, while the fee incentivizes active participation in building the blockchain.
Private transactions will set you back a whopping eight cents, which is also something to keep in mind!
The transactions are safer
It doesn’t matter if you’re using Western Union, PayPal, a similar service, or a bank, one thing is in common – they are all third parties. And that means you’re giving control over your money to someone else. When you transfer money via cryptocurrencies, you’re eliminating the third party (that’s one of the reasons why it’s so much cheaper) which makes the transaction that much safer. Nobody can limit the amount of money you can withdraw, nobody can tell you when to withdraw it, it’s almost identical to a hand-to-hand transfer.
So which cryptocurrency should you choose?
Depends on the type of person you are. If you are a freelancer like myself, who doesn’t nitpick with payment and can have the luxury of waiting for a payment for a few days, I’d say Bitcoin is probably your best option. It’s widely popular nowadays, most people have heard of it and, given that it can be purchased with a credit card, it’s probably the simplest solution.
Another major advantage of Bitcoin against other cryptocurrencies is high liquidity. That means it’s easy to trade, it’s not as susceptible to manipulation as low-marketcap coins and there are multiple places where you can trade it. Not that it matters much when you’re a freelancer, but it’s good to know. Also, with Bitcoin ATM machines popping up all over the place, it’s even easier to use the currency in the ‘real’ word.
Another popular solution nowadays is Monero, mostly because it is considered the most anonymous of all cryptocurrencies. If you are worried that the government may be monitoring your business (and they probably are) or if you simply don’t want anyone snooping around (which you shouldn’t) your financial information, you should give Monero a whirl. Its main disadvantage is that you can’t exactly buy it for cash, but need to buy another cryptocurrency first. With clients in any business, that’s not exactly a seamless experience, so take it at face value.
What about big business?
Freelancers with occasional payments don’t really need to worry that much which cryptocurrency they’ll charge in, I think. They’re not a huge business and pretty much any will do. But retailers, or large businesses that run countless payments daily – they need to keep network congestion in mind.
Some of you may have heard that, for example, Ethereum’s biggest problem nowadays is scalability. As it’s designed at the moment, it’s not really capable of handling a huge number of simultaneous transactions. Those of you with better memory will remember what happened when the popular blockchain game CryptoKitties went viral. So many people joined that it completely clogged the network, bringing transfers, quite literally, to a grinding halt.
Ethereum’s developers, as well as those from other popular blockchains, are working around the clock to make scalability a reality, and I’m certain one day they’ll succeed. But retailers, and especially those who wish to be industry leaders and market disruptors, simply can’t wait until that happens.
That’s why I’d suggest them to try Dolla. It’s a relatively new player in the cryptosphere, but one designed especially with retailers in mind. It promises a minimum of 10,000 transactions a second. To put things into perspective, Bitcoin processes 4.6 transactions, while Visa does approximately 1,700 transactions a second. With a 1 cent per transaction fee, it can stand shoulder to shoulder with even the biggest players in the industry.
Cryptocurrencies will, beyond any doubt, completely transform how we handle money. Both businesses and non-business entities will, sooner or later, turn to this new way of finance to handle their everyday activities and it will just be a matter of choosing which product suits you best. If you’re not sure where to start, I highly suggest you start with Bitcoin, Monero or Dolla, as they’re solid solutions.
Image Credit: Flickr / Fabian Figueredo