1.25 The Leading Cryptocurrencies for Digital Payments

 

During the early days of crypto, at the beginning of the 2010s, digital currencies were primarily used as digital, peer-to-peer cash. Initially, cryptocurrencies were invented as revolutionary digital assets that can be used as digital money independently of traditional financial institutions.

Since then, cryptocurrencies have considerably evolved and introduced numerous new use cases, but digital payments remain a key crypto functionality.

In this lesson, we’ll explore the leading cryptocurrencies for digital payments to find out how they work, what you can pay for with crypto, and which are the most prominent digital currencies used to make payments.

 

What Is a Digital Cash Cryptocurrency? 

Digital cash cryptocurrencies are cryptos that are mainly used as digital money for making financial transactions, payments, and trades. All cryptocurrencies can be used in this way. However, some coins are more geared toward financial transactions, while others are focused on powering decentralized apps (dApps), blockchain games, and NFTs.

That’s why companies that already accept cryptocurrency payments generally tend to support coins that are established as digital cash cryptocurrencies. 

However, these types of coins can be very different from one another in terms of transaction speed and network capacity. 

 

How Does a Cryptocurrency Payment Work?

Cryptocurrency payments work just like standard crypto transactions. When a user initiates a transaction to make a payment with crypto, they initiate a blockchain transaction that must pass through the network’s consensus mechanism before getting approved and processed to its destination. Network nodes are responsible for verifying the validity of all transactions.

To initiate a crypto payment, users need to have the destination public address of the receiver. When someone requests a payment, they must provide their destination address to the sender. In case a user wants to make a crypto payment on an e-commerce webshop or at a live payment spot that supports crypto, they need to scan the QR code of the merchant’s public address. 

Then, senders can confirm the transaction and send their crypto through the blockchain as a payment. The processing time of a crypto payment can differ depending on the blockchain in question. Sending a Bitcoin payment and a Ripple payment doesn’t take the same time. Also, the transaction time depends on how much blockchain traffic is currently on the network.

 

Cryptocurrency vs Fiat Currency Payments

Crypto payments are becoming increasingly popular. There were around 15,000 companies worldwide that accept crypto as of August 2023. 

So what is the difference between crypto and fiat currency payments?

Cryptocurrency payments are processed between crypto wallet addresses in a peer-to-peer manner, directly between senders and receivers. There aren’t any banks or payment processors as the middlemen, which also cuts down the processing fees compared to bank account transactions and payment providers. 

Fiat currency transactions sometimes take hours or even days to process, like in the case of traditional bank account transactions. 

International bank account transfers can take incredibly long because of the use of several intermediary banks and local regulations regarding foreign transaction approval. With crypto, users can send a cross-border payment through the blockchain anywhere in the world if they have an internet connection.

Besides individual users, online and on-site retailers can benefit from crypto payments because they can settle payments nearly instantly without depending on banks. Once a customer makes a crypto payment, the coins arrive in the merchant’s crypto wallet as soon as the blockchain facilitates the transaction. 

Also, with the help of state-of-the-art crypto payment solutions like zondacrypto pay, merchants can accept crypto and instantly convert it to fat currency. 

 

What Can You Pay For With Cryptocurrency?

As cryptocurrencies are becoming increasingly popular, more and more companies are including crypto payment options in their portfolios. 

These are some of the goods and services you can pay for with crypto at selected businesses around the world:

• Food and beverage

• Tickets for sports events and concerts

• Consumer electronics

• Travel arrangements and accommodation

• Aeroplane tickets

• Web hosting

• Shoes and clothing

• Charities

 

The Most Popular Cryptocurrencies for Digital Payments

Let’s look at some of the most popular cryptocurrencies for digital payments.

Bitcoin (BTC)

Bitcoin (BTC) is among the leading cryptocurrencies for digital payments, although the BTC blockchain’s processing time is on the higher end, with an average transaction time between 5 and 10 minutes. However, BTC remains the go-to choice for many crypto enthusiasts because of its leading market position and high value. Many crypto enthusiasts keep a considerable portion of their crypto portfolio in the form of Bitcoin.

Ripple (XRP)

Ripple (XRP) is a veteran cryptocurrency focused on fast cash payments. The XRP blockchain can process as many as 1500 transactions per second, which makes it a highly-scalable option for processing payments. Also, an XRP transaction costs barely a few cents, and it only takes a few seconds to achieve transaction finality. Ripple cooperates with numerous banks worldwide, which have already adopted Ripple for processing cross-border payments much faster than fiat currency transactions.

Litecoin (LTC)

Litecoin (LTC) is a lighter, more versatile, and faster version of Bitcoin. It uses a very similar blockchain structure to BTC, but can process transactions considerably faster. An LTC transaction takes an average of 2.5 minutes. This is why many businesses that accept Bitcoin payments also accept Litecoin as a faster, more convenient currency for retail payments.

Tether (USDT)

Tether (USDT) is the largest stablecoin on the market. Its price is tied to the value of the US dollar. One USDT coin is worth one USD at all times. Because of its stability, USDT is very useful for facilitating crypto payments. Tether is available in numerous versions on different blockchains, such as Ethereum, Tron, and Avalanche.