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How Crypto Inspires Trust Between Vendor and Customer

| June 01, 2022, 08:00 AM

Image by Eivind Pedersen from Pixabay

Cryptocurrencies are one of the most talked-about subjects in recent times and have been a recurring trend for several years now. The payment method is useful for its features and one of the technologies backing it: Blockchain.

Blockchain technology has multiple applications depending on its use and industry. In an interconnected world like ours, where speed and security are prioritized and data is gold, could cryptocurrencies be our last resort to gaining customer trust? Let’s find out.

Blockchain: What is it?

Blockchain, in itself, is a data-producing technology with built-in security features. It’s built on a cryptographic core, prioritizing consensus and decentralization to ensure the trustworthiness of every transaction. Otherwise known as distributed ledger technologies (DLTs), blockchains contain multiple data blocks, each containing one or more transactions. New blocks are also created regularly, which link to already existing blocks in a cryptographic chain that makes data tampering difficult, if not impossible.

Every transaction in a blockchain undergoes a validation process in which its inherent data is vetted by a consensus mechanism to guarantee the correctness and truth of each transaction.

Cryptocurrencies and Businesses (e.g., Casinos, Vendors, etcetera)

Every day, more businesses are adopting cryptocurrencies and digital assets for multiple purposes, including transactions, operations, and investments. The reasoning behind this move is fairly straightforward: customers. We live in a dispensation where data is a crucial commodity—and everyone is out to protect theirs, hence the popularity of VPNs and alternative payment methods. As a result, security-conscious businesses are extremely valuable to customers.

Take a business like online casinos, for instance, where brands like NewCasinos, trusted by players, dominate the market. For one, these outfits use SSL encryption to ensure a safe platform for their users. They also incorporate multiple alternative payment methods, allowing users to choose between the options they are most comfortable with. Some of these casinos go the extra mile to incorporate artificial intelligence and Blockchain technology to monitor user behavior and transactions, respectively. Let’s deconstruct these factors below.

Why Alternative Payment Methods (APMs)?

As the name posits, alternative payment methods are financial avenues besides traditional financial institutions that handle monetary transactions independently. There has been a surge in the use and creation of APMs in recent times, especially among businesses. The reason isn’t far fetched: unlike traditional financial services, APMs pose fewer financial hoops to customers and fewer regional restrictions. For instance, while banks require paperwork for foreign transactions, APMs can transact without boundary restrictions in less time and with less work.

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In addition, APMs offer users a level of autonomy and anonymity unusual in traditional finance. As an alternative payment method, Cryptocurrencies are founded on these three principles: borderlessness, autonomy, and anonymity—which, in turn, help with data security and trust-building.

Knowing that they have freedom and control over their finances, are unburdened by built-in restrictions, and are shielded from data losses or breaches is a prospect every customer relishes. So, it makes sense why vendors who accept cryptocurrencies are considered more trustworthy.

How Cryptocurrencies Made Customers Trust Again

Trust is the core of every financial institution and payment service. Businesses and people want to be assured that every transaction is processed and completed with utmost security and transparency. This requirement makes every financial intermediary involved in the transaction process a business of trust, whether it’s the central bank, commercial banks, or alternative payment services.

The responsibility of these financial intermediaries is to ensure that their customers’ financial transactions and accounts are safe. Customers are willing to pay transaction charges and account maintenance fees for these services. Sadly, this trust has waned with transparency and accountability issues over the years. The collapse of the Lehman Brothers, the Corralito in Argentina in 2001, and the Goldman Sachs 1MDB scandal are all crucial examples of breaches in the trust placed on financial institutions.

These, among other reasons, have spurred customers to search for new and better alternatives, leading us to cryptocurrencies—which have permeated the mainstream since 2009, when Bitcoin was first introduced to the world. What we have witnessed in the steady rise of cryptocurrency use and adoption is that the locus of trust has shifted from financial bodies and individuals to technology. And cryptocurrencies are leading the pack using cryptographic techniques that are more trusted than traditional financial bodies whose core principles are founded on institutional trust.

On the other hand, cryptocurrencies encourage customers to trust—not people or figureheads or institutions—but the technology behind it to guarantee the safety and anonymity of their transactions. And so far, it has lived up to its claims. Studies show that businesses that allow cryptocurrency have 40% more new customers who spend twice as much as credit card users.

Category: Local News, NEWS

About the Author - Stephanie Maris

Stefanie is a local blogger and social media content marketer from Maryland and most recently a wife and a mother. She has an unhealthy obsession with puns, sarcasm and caffeinated beverages.

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