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Why do people use crypto for online purchases?

A crypto resurgence is currently underway with Bitcoin having experienced a sustained rise in value from January 2023 up to March 2024. On 29th March 2024, the value of 1 BTC reached $69,711.70, exceeding its peak value during the crypto boom of 2021. Perhaps people will be a bit more reserved when it comes to investing, particularly after having heard stories of people who lost their life savings during the previous cycle of crypto mania. Unlike NFTs, which have lost a lot of their original hype, crypto is still popular as a medium of transaction. These are the top 10 reasons why people continue to use cryptocurrencies for online purchases.

1) Crypto is the future

For many people, crypto is the future. They hold the opinion that traditional currencies such as the US dollar or the Euro will, over time, lose their significance, and as such, even for reasons such as familiarity and keeping up with the latest in fintech trends, they’ll prefer to make purchases with crypto. Within the belief that crypto is the future, there’s are many other aspects driving its adoption, several of which are covered as separate reasons below.

2) Using crypto will increase its adoption

Whether its for investment purposes or a belief in the societal benefits of blockchain technology, some people use crypto because they believe it will contribute towards greater adoption among society.

3) Testing new technologies

There are estimated to be around 575 million cryptocurrency users worldwide. With a global population of 8.1 billion, this puts the global cryptocurrency adoption rate at around 7%. As such, there’s a long way to go for widespread global adoption and those using crypto at the moment are ‘early adopters’. People choose to use crypto for online purchases to test out new technologies and to see what potential it has.

4) It increases the value of cryptocurrencies

Many who use crypto for online transactions also have also purchased crypto as a form of investment. By using it for online purchases, the individual investor feels they’re doing their part to speed up its adoption (mentioned above in point 2) and to increase its value.

5) Crypto is more safe and secure

Crypto has its fair share of scams, pump and dumps and thefts, but some people prefer it because they believe it offers greater protection than transactions and banking with traditional currencies. Making a credit card payment, for example, often requires personal information to be shared during a transaction, leaving one susceptible to identity theft and fraud. Crypto transactions don’t require this. Also crypto wallets offer a degree of security, including multi-signature transactions and hardware wallet storage, that often seems to be a step up above security offered by traditional banking apps.

6) Aversion to monetary control by banks and governments

Being in control of one’s finances is reassuring. Unlike traditional currencies managed by central banks and financial institutions, crypto is decentralized. Bank failures, government mismanagement and incompetence can mean people’s savings, often accrued over decades of work, can be wiped out. For many people, using crypto keeps the holder of the currency in control, not the issuer.

7) Privacy and lack of trust towards banks and payment intermediaries

As stated in point 5, personal information isn’t a requirement to make transactions with crypto. Also given the decentralised nature of crypto, currencies aren’t controlled by any single entity like a government or a bank. Transactions occur directly between the buyer and seller, meaning there isn’t the involvement and prying eyes of multiple intermediaries such as payment processors.

8) Being an entrepreneur / innovator

In order to innovate in the crypto world, you unsurprisingly need to be familiar with crypto. Without having made crypto transactions, it would be like making mobile apps without having ever owned a mobile phone. There’s a lot of opportunity for innovation and startups in the crypto space, less along the lines of FTX, which revealed a dark side to the world of tech entrepreneurship, and more along the lines of greater global accessibility and shielding consumers from currency market fluctuations.

9) Being unable to cash out

Occasionally someone may have crypto funds that they can’t convert into traditional fiat currency. In that case, if you have funds that you can’t convert into regular cash, you might as well keep using it for online purchases.

10) Currency stability

Depending on where you live, you may be subject to inflation. To some extent, crypto can protect you from it. Bitcoin has a capped supply, meaning it’s protected from the inflationary pressures that occur when central banks can print traditional currencies in unlimited quantities. Decentralisation is also a key factor in that cryptocurrencies operate independently of central bank policies. There is, of course, the risk of high volatility as the value of a crypto coin can rise and fall in a short period of time.

Source of data: Statista & CryptoRefills Labs.

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