Cryptocurrencies are undoubtedly one of the most potential payment solutions today. The recent bullish trend of the market despite the bearish inclination for a major part of 2018- has further reinforced the perspective of digital coins in the modern payment system. The assurance of transaction data security, facility of
However, not all cryptocoins out there hold the potential to be a sound payment system. According to this Medium article, out of the hundreds and hundreds of coins, just 32 has been selected for payment functions.
In fact, a lot of factors come into play while deciding the potential of cryptocoins for payment facilities. The post below outlines the major factors which are considered while determining the status of a crypto coin for the payment scene.
The first thing that’s considered here is definitely the safety quotient of a coin’s blockchain. It should be able to guarantee an almost hack-proof potential to the users. the most common security issues to be faced by a blockchain are 51% attacks, double spend, side-chain mining, selfish mining and so on. The coin should promise no such typical issues with its blockchain.
This is another major factor that is considered while calculating the potential of a cryptocoin for the payment sector.
A crypto coin should be able to assure its own independent developed wallet to establish its potency in the payment scene. If the coin lacks its independent wallet and relies on some 3rd party option, it’s a huge flaw.
When you are dependent on some third party wallet, you have to depend on continuity of that very party. If it is able to respond successfully to an update, you will benefit. But if it lags behind, the dependent coin has to bear the losses as well. Thus, coins with native wallets always receive higher ratings compared to those dependent on 3rd parties.
Added to having native wallets, a coin is also expected to have mobile-version of the wallet to qualify for the payment system. The contemporary generation is increasingly getting mobile in the modern “smart” era. Thus, a mobile wallet is extremely important, added to the desktop version.
Rate of transaction fee
Crypto coins with lower transaction fees are mostly preferred for the payment system. An excessively high fee would render micro payments next to impossible.
Another chief factor while deciding on a crypto coin’s potential for payment system.
Shorter transaction time invariably translates to higher score. But there is a catch. Coins with excessively speedy transaction time are treated with suspicion. It’s because an unnaturally fast transaction time could result in malfunctioning blockchain which is even more dangerous. You won’t notice the problem with lower sum of transactions. However, the problem will become more prominent when the block gets larger & carry a huge number of transactions.
The premine of crypto coins is always a huge thing in the crypto sector. Some amount of capital is required to launch a promising business. The concept of “premine” in the crypto sector is something similar to that. It refers to percentage of optimum supply of coin for a crypto platform. The quality of premine of a coin is thus evaluated to determine the potential of the coin for sustainability and payment system.
No matter how advanced a crypto coin is, it will tend to lose out on its value if it’s not able to sustain itself in the long run. And a coin with no future potential cannot be trusted as a sound payment option. Thus, the journey and maintainability of a coin are studied as well to determine its potential as a valid payment option in near future.
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