How do you evaluate blockchain and cryptocurrencies as Payment Systems Standards?

Any payments system is built on a trust and a guarantee of a body. Be it a dollar bill or cheque or a swift payment. Trust is on 2 accounts 1) safeguarding against external embezzlers 2) ensuring the credit or the equivalent value being delivered Cards have been the best example of how the above are met. In case of other payment instructions it is often the second part that is considered. Crypto currencies and blockchain are new tech kids in the block. There has been guarantees and failure of them as the adoption is very complex and distinguishing fake and real becomes an art. Cryptocurrencies can thrive only if they are able to solve for the above trust factors in a simpler way Else they will remain as commodities Like precious metals

The BTC blockchain was established to be a global standard from day one, which included protection from breaches and reduced the need for risky and costly intermediaries. It is also setup to be impossible to pay to anyone twice and lastly the sender did not have to trust the receiver. Compare this to the ‘new’ faster payment systems, no global standard, different settlement times, format and security in every country. A lot of issues and risk of breach via various intermediaries and exposure to fraud by imitating the system. Compare this to card systems that has fully exposed the actual payment credential on a plastic card that can be used anywhere in the world, exposure to fraud led to various fraud protections layers, breaches.. etc

A proper evaluation involves consideration of different factors related to security, efficiency, scalability, and adoption. To be considered: Decentralization: Higher decentralization can enhance security and reduce the risk of a single point of failure. Speed of Tnx: Some blockchain networks may have slower transaction confirmation times and this can cause bad customer service- experience. Costs: This includes transaction fees, which should be reasonable and competitive with current traditional payment processing. Stability and Reliability:Frequent downtimes or technical issues can undermine confidence in the payment system. BCM (Business Continuity Management) is very critical to those processes.

Some of the aspects to could be. 1. Cost-effectiveness : Assess fees associated with sending, receiving, and converting cryptocurrencies, as well as any hidden costs. 2. Accessibility & Inclusivity: Consider how accessible the payment system is to people worldwide. Cryptocurrencies can provide financial inclusion to those without access to traditional banking services, but barriers to entry, such as the need for technology and internet access, should be evaluated. 3. User Experience: Consider the user-friendliness of the payment system. A complex or confusing interface can deter users.

The key to unlock the best of digital assets for payments is solving local liquidity. Sound and proven methods exists for the compliance pieces and for most other parts of the value chain. The biggest challenge is having on/off ramp access that does not depend 100% on partnerships with exchanges.

Exploring the diverse world of blockchains and cryptocurrencies has been like a thrilling expedition for me! I’ve discovered both public and private blockchains, stable and volatile cryptocurrencies, and even delved into the intricate realm of smart contracts. It’s been a journey of learning to find the right fit, aligning each unique feature with my own needs and preferences—it’s like piecing together a puzzle to create my own tailored crypto experience!

And let’s not forget the most authentic and promising version, central bank digital currencies. As money is ideally a tool of governments, CBDCs are important for future of digital payments.

The volatility of cryptocurrencies was a consistent concern for many of my peers, especially those who wanted to use them as actual currencies rather than speculative assets. This led me to explore stablecoins - cryptocurrencies pegged to stable assets, often fiat currencies. Speaking with a friend of mine from Argentina during an inflation spike, I witnessed locals using stablecoins to preserve their savings. Seeing the practical application of these coins in real-world scenarios underscored the significance of having diverse types of cryptocurrencies to cater to varied needs.

A common mistaken assumption is that private blockchain is somehow more secure than public. Private really means that the system lacks the same redundancies that exist on public chains and is susceptible to many of the same weaknesses inherent in legacy systems.

During a trip to Southeast Asia, I encountered local artisans who, despite their incredible craftsmanship, lacked access to traditional banking systems. Yet, many had adopted cryptocurrencies as a means of trade. By leveraging blockchain, they had essentially created a decentralized, peer-to-peer marketplace, enabling them to connect directly with global customers. This profound democratization of finance, made possible by blockchain, was truly heartening to witness.

Researching into the various use cases and scenarios of blockchain and cryptocurrencies has been enlightening! I’ve seen how they can revolutionize remittances, making them swift, secure, and accessible, especially in places where traditional financial avenues are scarce. They’ve opened up new possibilities for microtransactions in the digital realm, and have introduced innovative, inclusive financial activities. And the concept of having a digital identity that’s self-sovereign and verifiable without centralized control? It’s like holding the key to your own, unassailable digital kingdom!

Programmable money, enabled by blockchain, allows digital currency like stablecoin to be coded with predefined logic, offering a versatile payment solution for asset and security transactions, particularly aligning with Delivery-versus-Payment (DvP) - simultaneous payment and delivery of goods or securities. As a notable feature of programmable stablecoin, it facilitates various NFT-related use cases, serving as a transactional currency and ensuring buyers receive tokenized items, whether they represent, for instance, digital art, music tracks, or other assets.

I vividly remember a time when I had just started diversifying my cryptocurrency holdings. I had tokens from different blockchains, held across a multitude of wallets. The challenge arose when I tried to make a transaction between them. It felt like trying to send an email from Gmail to Yahoo, only to find out they didn't speak the same language. This was my first encounter with the need for interoperability in the realm of cryptocurrencies. The various standards and protocols, like ILP, Lightning Network, and Atomic Swaps creating a cohesive, interconnected archipelago. The vision of a unified, integrated crypto ecosystem might still be on the horizon, but with these innovations, it feels tantalizingly within reach.

Hacks, thefts, and cyberattacks live everywhere that there is money. Even in the traditional banking systems there are many threats that due to centralized nature of it, most of them never spread out. Because of the decentralized nature of blockchain and crypto world, every news spreads easily. I’m not trying to say it’s a very safe place to enter, but it’s not as unsafe as the news spreads around it.

Blockchain and cryptocurrencies have significant potential to reshape financial systems, offering inclusivity and tailored solutions. The variety in types and innovative protocols are paving the way for broader adoption. However, the inherent challenges like volatility and regulatory uncertainties are critical hurdles that need to be addressed to fully harness the benefits of this technology.

Diving headfirst into the blockchain space, I faced firsthand the very challenges that give many pause. I remember the cold sweat when a project partner's wallet was hacked - a stark reminder of the digital realm's vulnerabilities. Later, legal ambiguities came to the forefront. Two participating countries had starkly contrasting crypto regulations, leading to unexpected hurdles and complexities. While pitching a crypto-based solution to a traditional enterprise, the skepticism was palpable. The novelty and misconceptions surrounding blockchain made it a hard sell, underscoring the larger challenge of mainstream adoption.

? As we wanted to mainstream cryptocurrencies and blockchain technology as payment system standards, the arising of cost for financial insitutions to implement an effective system or tool that could detect and deter money laundering to comply to its regulators to avoid penalties and settlements. This include of hiring the expertise, budget training, and more cost allocation. ? Islamic countries may want to make it as Sharia compliant that comply with Islamic financial principles as this may involve usury (riba) and uncertainty (gharar). Hence, the acceptance for Muslims as payment system standards until it provide a sound relief to their mind.

I consider the user experience is crucial; by simplifying interfaces and enhancing customer support can drive wider adoption. Additionally, fostering community-driven development and open-source contributions is key for innovation and overcoming challenges in blockchain technologies. Lastly, exploring interoperability and cross-chain solutions is vital to build a cohesive, expansive ecosystem in the decentralized landscape.