Over the years, Ethereum has become not only a popular investment asset and a tool for creating decentralised apps based on smart contracts but also a new form of mutual settlements using crypto payment processors, giving businesses access to a new generation of solutions for receiving payment for their services and products, designed to transform the field of commerce and turn the idea of the principles of mutual settlements.
This article will be your quick guide to the world of crypto payments and will tell you what Ethereum is and what advantages it offers as a means of payment. Ultimately, you will learn how to accept Ethereum payments efficiently and quickly to be on trend and keep up with technological advances.
- Ethereum is one of the most popular coins for making payments on different blockchain networks.
- Ethereum makes it possible to make intercontinental payments with high speed and low fees.
What is Ethereum, and What are its Features?
Ethereum, one of the most popular cryptocurrencies on the market today, is a platform where it is possible to develop decentralised applications using blockchain technology and smart contracts. Ethereum is a general decentralised virtual mechanism with its own virtual currency for settlement, “Ethereum” (ETH). One unit of ether is divided into Finney, Szabo, Gwei, Mwei, Kwei, and Wei – the smallest part of ether.
Ethereum has two kinds of networks: a test network and a real network. In the real network, you have to pay real money to get Ether. In turn, Ether in the test network costs nothing, and it is not difficult to get it. The test network is created to test smart contracts without risks for the parties before their application in the real network. The test of smart contracts is performed as follows: one contract or contract is uploaded to one of the test networks. Next, the contract is assigned test parameters that differ from the real network in which the contract will operate. And then, manually, the main types of activity are selectively tested.
Smart contracts have a mathematical precision and logic of operation that establishes how methods should change the terms of the contract, what events should be released, in what case, when and to whom assets should be transferred, and when to impose sanctions on this or that party.
The Ethereum network uses various consensus algorithms. The Proof of Authority (POA) algorithm is relatively new. In this algorithm, transactions are verified by a certain number of nodes that act as validators for the system. Any new node to be added must be voted by the validated set of nodes. This consensus is also used when a node is removed from the network. Thus, Proof of Authority provides many benefits to the network: it gives more configuration in terms of time and latency, and it is more secure because of the way nodes are added.
What Are The Advantages of Ethereum in Payment Processing?
Ethereum and its solutions open a new era in digital business by providing access to all the advantages of blockchain networks. Thanks to decentralisation, smart contracts and high-speed transaction processing, Ethereum is a universal tool both for developing crypto projects and for working with crypto processing models for payment acceptance due to the following features.
Stability and Reliability
Compared to traditional payment methods, payment transactions within the Ethereum blockchain provide more stability and reliability because the nature of their work lies in the popularity of the coin in the market, which has caused the active attention of investors and traders expressing their support by investing in the development and promotion of new solutions that are being actively worked on.
This helps companies confidently accept crypto payments using Ethereum without worrying about unfavourable consequences, usually appearing in unpopular projects that question their reliability and value.
High Speed of Transactions
The Ethereum network has been actively used for many years to conduct fast transactions between different users, regardless of their location. It enables efficient payment gateways to send or receive digital currency between different blockchain networks with minimal fees.
In terms of traditional and digital business, crypto transactions based on the Ethereum network have gained popularity in recent years due to the development and practical application of new network solutions delivered with each update of its protocol. As a result, the network has become one of the main elements of the digital crypto payments ecosystem in the entire market, which has become the foundation for high demand from investors and business representatives wishing to modify how they receive payment for their goods and services.
Low Transaction Fees
The Ethereum blockchain network is one of the most efficient networks in terms of low-cost transactions. As of today, transactions between the Ethereum network and other networks are among the most cost-effective because the network’s protocols allow it to process a large number of requests at once, which is a great advantage when there is a high load on the network due to increased demand.
On the other hand, the Ethereum network opens the ways to make transactions with lower transaction fees due to systematic updates of its architecture and algorithms that reduce the number of errors and failures in accepting crypto payments within companies’ business processes.
Tokenisation is a very practical process of converting something of value into a digital token that can be used in a blockchain application to maximise its utility.
On the other hand, any asset that has been digitally registered can be tokenised on the Ethereum network. In this case, tokenisation helps to unbundle previously unwieldy assets, such as real estate, that have become simply too expensive and to disrupt new economic models, such as crowdsourced data management, to speed up and simplify the processes of dealing with tangible assets as part of settlements between individuals and businesses based on Ethereum payment gateway.
Sellers who have not previously worked with crypto assets may find sending and receiving digital currencies difficult. Cryptocurrency wallet addresses are a long string of numbers and letters. Moreover, each crypto payment requires a different address to receive.
Thanks to the Ethereum Name Service (ENS), users can create a universal alias for all their public addresses. Instead of using an unreadable key array to receive crypto payments, they could have a single ENS domain, such as “Cryptopayments.eth”.
How to Accept Payments in Ethereum?
Today, among the numerous crypto payment methods that exist on the market in different blockchain networks, Ethereum offers a universal and efficient solution for fast domestic and crypto cross-border payments. In turn, companies that accept crypto are actively implementing, in particular, ETH Payment gateway in their infrastructure to expand the possibilities of interaction with users who work with ETH as the main investment instrument and the development of products based on it.
In order to successfully accept Ethereum payments, companies need to integrate into their ecosystem a crypto payment system, which is a service that allows companies to accept cryptocurrencies as a payment method.
Depending on the specific platform, users are provided with different integration tools. These tools can be crypto APIs, e-commerce plugins, invoices, various tools for accepting donations and other solutions. In addition, depending on the specific crypto payment gateway, the company can get different coins for payment.
An ETH gateway is typically embedded in the core infrastructure of a website when paying for a company’s digital services and goods and is integrated with other solutions used as payment tools through secure protocols that allow encryption of users’ personal data. This allows accepting Ethereum payments in a safe and secure environment using the latest transaction data processing systems within one or several blockchain networks, which, in turn, is an undeniable advantage for businesses working with ETH.
Today, businesses can expand their horizons once they decide to accept ETH payments. In the long term, it is expected that this project will not only eliminate transaction costs but will also become the basis for the creation of completely new ways of transferring payment information between different entities, which will significantly reduce the processing time of requests and reduce the dependence of companies on banks and similar institutions.