Cryptocurrencies and digital currencies come with a huge amount of hype and promise. Since they first began to gain exposure, they’ve been the centre of a raging and ongoing discussion about how useful they could be.
Right now, there are a lot of uses for cryptocurrency, but many of these are confined to things like speculation and trading. Real world, physical applications for cryptocurrency do exist, but are still somewhat limited.
And with hundreds of thousands of crypto transactions taking place every day, there’s clearly a big user base and a ripe opportunity for bringing this technology into the cold, hard reality of the non-digital world.
It’ll be a big step for crypto, though. Going from a hypothetical concept to a real, functioning currency to challenge fiat in just a few years will be a seriously daunting task. But it’s already started to happen.
Cryptocurrency ATMs and crypto-friendly vendors do exist and could well increase in number in the coming years. Right now, though, there are a few barriers to the widespread adoption of crypto as a real world means of payment.
We need to break through these and make it easier to use cryptocurrencies in real world transactions. But how? First, let’s look at the pros and cons of using crypto in this way.
Cryptocurrency in the real world: the good
There are a whole lot of benefits to using crypto instead of fiat currency in physical payments. One of the big pros is a lack of third party involvement in payments. It’s a peer-to-peer system with a lot more freedom for the parties involved.
It’s cashless, too; avoiding a lot of the issues with paying in paper and making the payment process smoother and easier without things like international fees associated with credit cards.
Another plus is generally lower transaction fees with crypto payments, compared to other options like wire transfers, credit cards, and agents like PayPal. Crypto can offer much lower processing fees and lead to quicker, easier transactions.
Cryptocurrency in the real world: the bad
Unfortunately, there are several issues holding back widespread adoption of real-world crypto payments. One of the big ones is crypto’s volatility. Since prices of coins can fluctuate so much and so quickly, there’s no guarantee that the amount you paid will be worth as much when the seller comes to use it. That’s a problem.
In addition to this, while potentially much quicker than fiat methods, crypto payments can still take a long time to authorize and process. This can depend on the time the transaction is completed along with some other factors, but it’s still annoying in a fast-paced world. Nobody wants to be waiting in a store for ten minutes or more for their payment to go through.
So, what’s the solution to these issues? How do we build a system where crypto can be used easily and painlessly in real-world situations?
A new way of using crypto
A blockchain startup called T.OS wants to create a new system, a new way of using crypto to pay for goods in the physical world which gets around many of the existing issues.
It’s a fairly straightforward system, which uses two separate coins. The first kind, T.OS, is an ordinary crypto token that users can easily buy via normal exchanges. It’s stored on a public blockchain, and like other cryptocurrencies it has no fixed price and can be traded globally.
However, users can also convert this token into a different kind of currency, called T.OSp. This is done through special local exchanges, and the result is a cryptocurrency with a fixed price, based on the local fiat currency.
T.Osp can be pegged to specific currency, based on where the user resides. For example, 1 T.OSp might be worth $1 in the USA, and ¥1 in Japan at the same time. Users will only be able to purchase T.Osc from any exchange, and then change it to T.OSp only in designated exchanges in each country, with a peg to its national currency, and it won’t be possible to use it in another country or exchange.
This removes any worries about fluctuation or volatility; allowing users to pay in a currency that both they and the vendor knows isn’t going to change in value.
The currency also offers faster transaction speeds, making the payment process easier and less stress-free for both parties. T.OS is currently working in Singapore, where the first exchange exists, and it could eventually be applied to other parts of the world.
As cryptocurrency gains prominence and becomes ever more widely used, it’s going to be important to develop systems to bring it from the digital realm into real life to compete with fiat currencies. We’re still in the early stages of using crypto this way, but the future holds a lot of promise.
Disclaimer: This is a contributed article and should not be taken as investment advice