The benefits of transacting through cryptocurrency are many: security, fast delivery, lower transaction fees. Additionally, utilizing a digital coin or token also streamlines the process of sending payments across international borders. Typically the exchange rate of cross-currency payments is high; but when both parties agree to send and accept payment in the form of cryptocurrency, they effectively bypass typical transaction penalties.
At this point, you may be wondering if the use of cryptocurrency payments sounds too good to be true. Well, yes and no. The benefits are real; however, there are some downsides. First off, mass adoption and distribution of cryptocurrencies is still unfolding. Even if you or your organization is ready to implement blockchain-based transactions, there’s a good chance your customer or partnering vendor isn’t quite up to speed.
Blockchain’s Upward Trend to Adoption
For years, futurists and crypto enthusiasts have written about blockchain’s imminent adoption, yet we’re still not quite there. While there is no way of predicting exactly when the majority of the world will run on blockchain and utilize cryptocurrency, optimists believe we are in the midst of an incline that rivals the late 90’s dot com boom. This November 2017 Forbes contribution, It’s 1994 in Cryptocurrency, argued (at that point in time) late 2017 was to cryptocurrency as 1994 was to Internet adoption. Continuing along with this comparison, people increasingly recognize the value of the technology and early adopters are already creating global ripple effects that may influence use, but it could still be a few years before sending Bitcoin to friends and businesses becomes as ubiquitous as Venmo-ing.
The good news about global adoption being on the horizon rather than imminent is that it may give developers and blockchain organizations time to perfect the payment process, as there are still a few kinks that must be worked out, namely: human error. Although blockchain was designed to support the secure transfer of data and transactions, humans are imperfect, and very capable of messing up this perfectly plotted structure. Here’s how: many people have already made (and will make) the mistake of sending a cryptocurrency payment to the wrong address.
A Crypto User’s Worst Nightmare: the Wrong Address
There are countless stories of people losing hundreds, if not thousands of dollars after sending a payment to the wrong address. Mistakes are easy to make. After all, crypto addresses tend to be impersonal, indistinguishable jumbles of numbers and letters and, subsequently, very easy to mess up.
In more traditional transactions, this mess-up could be resolved with a call to customer service. But on the blockchain, there is no customer service or central governing figure. On the blockchain, users are responsible for the correct distribution of their own funds. Because there is no one person or entity whose sole responsibility it is to correct other people’s mistakes on the blockchain, many think that if they do send money to the wrong crypto address there is nothing that can be done. But sending a payment to the wrong address doesn’t necessarily mean your funds are gone forever. Here’s how:
First, there’s a good chance the payment will be rejected. Bitcoin addresses (which are typically long strands of numbers and letter of varying lengths) are encoded with a checksum. A checksum, as defined by Learn Me a Bitcoin, is a small piece of data that allows you to check if another piece of data is the same as expected. Checksums are designed to reject payments that do not lead to actual addresses.
In some (rare) cases a mistyped Bitcoin address may make it pass the checksum. If this happens to you, it is likely lost. But rest assured that the probability of this occurring is unlikely.
Solutions on the Horizon
However, there are emerging blockchain ecosystems designed to solve for this exact pain point. Tip Blockchain is one ecosystem designed to bypass international borders and remove technical barriers between organizations and end users. Their platform recognizes how long and intimidating crypto addresses can be to first time users; Tip Blockchain creates easily searchable usernames, so users (and organizations) can send payments without fear of typing the incorrect address and losing a payment for good.
The inception of cryptocurrencies has transformed how businesses can transact with customers, pay employees, and build relationships with vendors. But before this payment solution can serve the global masses, user pain points must be addressed. People must feel comfortable knowing that their payments will make it to their intended destination. If intimidation plays a role, it will take much longer for global adoption to manifest.
