Blockchain payments are one of the most advanced features of the blockchain technology. It has the potential to make the lives of users easier yet blockchain payments are misunderstood at times.
Here in this article, we will see ‘why blockchain payments are misunderstood?’ and the reasons for why it is misunderstood.
Why Blockchain Payments Are Misunderstood?
Blockchain payments are often misunderstood attributing to the nature and a few features of the process. Let us dive deep into the reasons and understand more about it.
Anonymous Nature of the Blockchain Payments
One of the reasons for blockchain payments getting hugely misunderstood is the anonymity associated with the transaction taking place in the network.
Blockchain transactions have an anonymous nature which shields the privacy of the users. This anonymity can often cause misconceptions regarding the genuineness and legitimacy of the transaction and the methods themselves.
Even though the details of the blockchain address that you use for transactions remain anonymous the transactions are recorded on the ledger. This can cause more confusion and misconceptions. This is one of the major reasons why blockchain transactions are misunderstood.
Decentralization
The blockchain platforms are decentralized meaning there is no single authority or a group controlling the transaction. The transactions are not under the monitoring of any authority.
This is not similar to the traditional transaction methods, the bank transfer, credit card transfer, and related which are centralized and have a single authority governing their operation.
Therefore, those who have been familiar with the centralized transaction methods may find this form of decentralized transaction more chaotic. Such users may not be able to completely trust the platform and may find this method suspicious.
Volatility
All cryptocurrencies are subjected to high and instant price volatility. The price volatility of the cryptocurrency has been the same since it was introduced years back. This makes it difficult for the user to predict the price change of the crypto or to understand the time at which the value of the crypto may have a price drop or experience a price hike.
Therefore, the user may not find it reliable when compared to the other transaction methods. The price volatility of the crypto contributes to the uncertainty of making decisions when choosing it as a method for making your transaction.
Complexity
Blockchain is a comparatively new method of transaction platform and an average user may find it difficult to comprehend the operation of the platform. The factors related to the functioning of the platforms such as blockchain, cryptography, consensus mechanism, and distributed ledgers may not be easy for all users to learn and understand.
Therefore, the lack of knowledge in blockchain payments can lead them to be uncertain about the method and can lead to related unsureness in choosing it as the payment method.
Adoption Challenges
Blockchain payments are swift and smooth. You can transfer your funds quickly and there are fewer transaction fees. Even though these are considered the most admired fayre of the method, it was not adopted as widely as it was supposed to.
Even after these years of launching the majority of people still stay a few steps away from making blockchain payments. This leads to more sections of society being uncertain of the method. People may feel unsure about the practicality of the system and hence may not show much interest in using it.
Uncertainty of the Use Cases
Still, blockchain payments are associated with illegal activities and widespread speculation. This makes more users doubt the genuineness of the platform. When in reality the platform can be used to perform international transactions, micropayment, and even supply chain payments.
Uncertainties in Regulation
The regulations related to blockchain do not remain the same across different landscapes and vary according to the jurisdiction. The set legal guidelines have been getting updated and evolved over the years, which makes it difficult to state a general regulation for blockchain payments.
Hence, people using it from different jurisdictions may find it hard to conceive the concept of blockchain payments. The lack of regularity and inconsistency can make it hard to understand the legality and also the acceptance of the payment method.
The common misconceptions surrounding blockchain payments appear to be one of the major reasons for it still not being accepted as a wide payment method.
