Which cryptocurrency to accept as payment?
You’ve decided that you want to accept bitcoin and cryptocurrency in your store, then you’re faced with the question, “Which cryptocurrency to accept?“.
What cryptocurrency do your potential customers own and would they pay with?
This article explains which cryptocurrencies are suitable as a means of payment and which cryptocurrencies accepting makes sense.
Satoshi Nakamoto referred to Bitcoin as a “peer-to-peer electronic cash system.”
A digital payment system (electronic cash system) that enables people to make payments directly to each other (peer-to-peer).
There are now thousands of different cryptocurrencies, coins, currencies and tokens for a wide variety of applications.
But which cryptocurrencies are specifically suitable for payment? Which cryptocurrencies can be used like digital money, or even better, like digital cash?
You have decided to be a merchant and want to accept one or more cryptocurrencies besides Bitcoin?
But which of the numerous currencies should be offered in the own store?
As a merchant, you’re also faced with the question, “Which cryptocurrency will your customer use for payment?”
End users, in turn, are faced with the question, which cryptocurrency is accepted by most merchants? Which cryptocurrency will meet the requirements for fast, cheap secure and convenient payment?
There are 160 fiat currencies worldwide and Coinmarketkap lists over 2,000 different cryptocurrencies.
Which cryptocurrency accept makes sense? Which of these cryptocurrencies play a relevance and are predestined for payment processing between end customers and merchants?
Which of these cryptocurrencies have a corresponding distribution so that numerous end customers can also pay with them in my store.
It is recommended for the dealer to make a targeted selection. Too much choice of different cryptocurrencies can confuse a customer and cause them to abandon a purchase. When selecting the cryptocurrencies offered, the motto should be, less is more.
In any case, Bitcoin, as the mother of all cryptocurrencies, must be offered. Bitcoin definitely needs to be accepted as a cryptocurrency.
Then it should be well weighed whether to accept and offer more cryptocurrency.
This is because end customers who have cryptocurrencies definitely also own Bitcoin and can pay with it.
So do more cryptocurrencies make sense or does it become confusing and confuse my customers?
If one decides to offer additional cryptocurrencies for payment, the question arises as to which of the cryptocurrencies have relevance with the target group to be addressed.
Most important cryptocurrency as a means of payment according to Coinmarketcap
The market capitalization of the various coins provides an initial guide. At Coinmarketcap you can find all coins sorted by market capitalization.
Most important cryptocurrency as a means of payment according to Coinmarketcap
The cryptocurrencies in the top 20 play a real relevance here. Accepting as a cryptocurrency, you can exclude the coins on the places behind it.
All cryptocurrencies listed below are something for speculators or enthusiasts, but have no relevance for payment processing.
However, the market capitalization only tells you what the total value of the coins in circulation is. No statement is made about the spread and acceptance as a payment method.
Most important cryptocurrencies as a means of payment by transactions
A better guide can be the number of transactions or the transfer volume that a coin is transferred per day.
As of the analysis date of October 4, 2019, the following transactions have been executed globally:
Most important cryptocurrency as a means of payment by transactions
However, even this presentation only shows what amounts have been transferred and does not allow any conclusions to be drawn about the use for payment.
Which cryptocurrency do my customers pay with?
As a merchant, when I have to decide which cryptocurrency my store should accept, it’s essentially a matter of how prevalent the cryptocurrency in question is among my target audience.
A user who wants to use their cryptocurrency for payment will be guided by the following considerations when making their choice:
- Is the cryptocurrency supported by major wallets?
- At which exchanges, bureaus de change and vending machines can I quickly and easily buy the corresponding cryptocurrency?
- Does the payment processor support the appropriate cryptocurrency for payment processing?
- At which merchants can I pay with which cryptocurrency?
Based on the entries listed on Coinpages and the cryptocurrencies offered, it can be said for the German-speaking region that Bitcoin is the undisputed cryptocurrency.
The second and third places are shared by Ethereum and Litecoin. Dash is becoming increasingly widespread in German-speaking countries and has now displaced Bitcoin Cash.
The Bitcoin SV solution, on the other hand, plays an insignificant role. Only one merchant actively supports this payment method.
Lightning, as a payment method based on Bitcoin, has also been developing more and more recently.
The listed cryptocurrency only tells how often the respective cryptocurrency is offered as an option for payment.
No statement is made as to how often the respective cryptocurrency is actually used by the user as a means of payment.
The mail order retailer ShopinBit has published an analysis of ordering and payment behavior in its store.
ShopinBit offers an assortment of more than 5000 items and exclusively accepts cryptocurrencies such as Bitcoin, Lightning, Dash, Monero, Bitcoin Cash and Litecoin.
The August 2019 analysis, titled “King of Germany,” ranked Dash first by number of orders and order volume. More than 60% of all orders were paid with Dash. Bitcoin came in second place with about a quarter (25.42%) of all orders, with Lightning and Litecoin coming in a distant second. Bitcoin Cash and Monero played almost no role, being below 1%.
If the products are high-priced, the first choice of payment method is again Bitcoin.
Payment service provider Cryptopanel also publishes the monthly usage of cryptocurrencies Bitcoin, Litecoin, Bitcoin Cash and Dash.
By revenue, Dash and Bitcoin regularly battle it out for primacy in the top two spots.
The third place goes to Bitcoin Cash and then comes Litecoin with a decreasing tendency.
Looking at the various analyses, it becomes clear that Dash is becoming increasingly important for payment in German-speaking countries.
The use of Bitcoin is also dependent on the price development. If the bitcoin price drops, less bitcoin is issued. If, on the other hand, the share price rises, buyers become more willing to spend.
However, one should not yet concede general validity to these analyses. The fluctuations in the use of crypto payment methods are at least as volatile as the prices of these currencies.
Summary: Accept cryptocurrency
The most important message from merchants to their customers should be that they accept cryptocurrencies. This message should be clearly communicated on the website alongside the other payment methods.
As a minimum, Bitcoin must be offered as the most important cryptocurrency. As a minimum, Bitcoin must be offered as the most important cryptocurrency.
If the amounts involved are very small, it is advisable to accept Lightning.
If the store is aimed at tech-savvy crypto fans who also appreciate privacy, the payment methods Dash and Monero should be offered.
The integration of additional cryptocurrencies does not necessarily expand the number of potential new customers. But gives a positive signal to some crypto community and you benefit as a trader from appropriate inclusion in blog posts and directories.
Listed below are the main cryptocurrencies used for payment processing. The respective link behind the currencies refers to the traders in German-speaking countries that accept the respective cryptocurrency.
- Bitcoin (BTC)
- Bitcoin Lightning
- Bitcoin Cash (BCH)
- Ethereum (ETH)
- Bitcoin SV (BSV)
In the following article, the cryptocurrencies relevant for payment processing will be presented in a bit more detail.
Read now the article: “The main cryptocurrencies as a means of payment“.