Cryptocurrencies are one of the most important developments that have occurred in the world of finance. However, even though cryptocurrencies are such a major technological and financial breakthrough, they are still tricky to send from person to person. This makes them difficult to use as actual currencies, which is what they were designed for.
How is Cryptocurrency Sent Through Blockchain?
Right now, if you want to send some cryptos to, say, a friend or a vendor from whom you just bought an e-book, you need to rely on the blockchain.
You must log in in your virtual wallet, and then send funds using the recipient’s “receive” address or QR code. Blockchain sends crypto using an address through a server (NODE) which can be seen by a public scanner. The blockchain technology will validate and complete the transaction, and through a smart contract, you’re guaranteed that the transaction can be trusted even if one of the parties doesn’t trust the other.
This actually sums up the biggest advantage of using the blockchain to secure a payment: that no third party is involved. In fact, not only do you not have to trust the person or company you’re sending your hard-earned virtual money to, but you don’t have to pay any fee or deal with an intermediary or middle man. This is a great benefit for those who envision a world where the largest financial institutions hold so much power in shaping our society, but at the same time, things are never so simple in the real world.
What are the cons of blockchain technology for sending cryptocurrencies?
The biggest advantage of sending cryptocurrencies through the blockchain is also the biggest disadvantage: without intermediaries, there are no legal protections and no one to guarantee for the payment. If a malicious party hides a recursion bug in their smart contract to drain your Bitcoin wallet dry, there’s no one who can be held responsible except you. If something goes wrong and the product you bought is not what you want or like, and the cryptocurrency is sent, you can’t have it back.
Another potential drawback for some is the fact that the blockchain itself is a public ledger, so all transactions are recorded, making them publicly available, to some extent. Most information can be extracted at a later time to identify everyone involved in the transaction as well as their private information such as shipping address, the amount of money involved, and more.
Blockchain Alternatives For Sending Cryptocurrencies
Recently, a key development has been made in the crypto transactions space that will allow cryptocurrencies to be sent from person to person with significantly more ease. iTransfer is a new technology that allows cryptocurrencies to be sent by email, SMS, WhatsApp, Facebook messenger, and other social media platforms. Transfers are sent in a closed point-to-point network, meaning the public or miners can’t see the transaction. Transactions are not dependent on blockchain technology for validation and completion. This dramatically speeds up transaction time and makes them simpler to complete.
Transactions are password protected just like the e-transfer feature offered by many banks. Having the password validates that both parties consent to the transaction and that the transaction is legitimate. The hybrid network acts as a payment channel between the two parties involved. Anyone who wants to use iTransfer to send cryptos back and forth without using the blockchain must download the AABB Wallet (for free) as it the only crypto wallet that makes these kinds of transactions possible.
If you’re wondering whether this means having a middleman to secure the transaction once again, well the answer is yes. It’s a compromise that can help make transactions more secure since, for example, you are able to cancel a payment and cryptos that are not accepted by the receiver within 30 days are sent back to the sender without having them disappearing into cyberspace.
Since transactions are not recorded on public blockchains the way normal cryptocurrency transactions are, but secured within the AABB network, iTransfer is also extremely private. This does mean trusting a third party to secure all your transactions. You can do this with a high degree of confidence though, as there is no point of entry to hack. Required know-your-client (KYC) identifiers are the only information collected and it’s encrypted.
Crypto Transfer Security
Sending cryptos to a receiver is not devoid of risks. Even if the system cannot be hacked in the proper sense of the term, scammers have found many ways to take advantage of people’s imperfect knowledge of the cryptocurrencies world and steal their money. Also, the blockchain isn’t exactly immediate as miners are required to validate transactions.
Some alternatives such as iTransfer are available and hold promise, but these technologies are brand new. Until they grow significantly in popularity, it’s hard to tell whether they could ever become mainstream or not. And even if they do, any database still is prone to cyberattacks, fraudulent operation, malicious modifications, or just human mistakes. To identify and combat potential security risks, AABB has employed white hat hackers to run extensive testing and have not been successfully hacked.
The Bottom Line
Let’s face the truth. Blockchain didn’t live up to its original dream of a disrupting technology and revolutionizing who has control over access to money. However, cryptocurrencies may still have the potential to shift the power balance if they overcome their limits (e.g. clunky and unsafe transactions), and become more readily available to the public.
The upside of iTransfer include the fact it can be incorporated by other wallets via API. Further, this technology has an advantage for businesses, so that they can use crypto to pay employees and suppliers while keeping transactions confidential especially from the prying eyes of competitors. Also, it is user friendly, even for those who don’t understand how to use deposit addresses.
New technologies such as iTransfer can be instrumental in making crypto payments a lot smoother, faster, and private. However, only time can tell whether they could be really adopted on a broad basis.