Ethereum Payments

Every day, millions of people face the same challenge: moving money across borders is slow, expensive, and often frustrating. A freelancer in Bali waits days for payment to clear from their New York client. This particularly affects people in regions with limited banking infrastructure, making it difficult to participate in the global economy.

This isn't a far-off dream – it's happening today on Ethereum. While traditional financial institutions have built robust payment systems over decades, they often remain constrained by borders, working hours, and legacy infrastructure. Ethereum offers a new paradigm: a global, 24/7 financial platform that enables near-instant, programmable transactions for anyone with internet access.

Remittances: cheaper international transfers

For millions of people working abroad, sending money back home is a regular necessity. Traditional remittance services often come with high fees and slow processing times. Ethereum offers a compelling alternative.

Access to Global Currencies

In many countries, inflation is a pressing concern, often accompanied by limited access to foreign currencies. People in these situations struggle to preserve their wealth as they are forced to hold rapidly depreciating savings.

The Ethereum community has created a robust alternative financial system that is independent of any nation’s monetary policies or control.

Ethereum users can use stablecoins—tokens typically tied to strong currencies like the US Dollar. By earning and saving in cryptocurrency, people can protect themselves from high inflation in their country, helping to preserve or even grow their purchasing power. This also enables easier payments for goods and services, both locally and globally.

Buying Goods and Payment for Services

Many businesses are beginning to accept ether (ETH) and other cryptocurrencies as payment. For example:

• Newegg: The popular electronics retailer accepts Ethereum for purchases in select countries.
• Travala.com: This travel booking platform allows users to pay for hotels and flights using Ethereum.
• Shopify: This popular E-commerce platform which serves as a platform for hosting businesses also accepts payments for goods and services using Ethereum.
• Sotheby's: This organisation trade fine and decorative art, jewellery, and collectibles and allows for payments using Ethereum and other cryptocurrencies.

Countries like El Salvador and the Central African Republic have even adopted cryptocurrencies as legal tender, paving the way for wider acceptance of Ethereum payments in everyday transactions.

In countries where their means of payment have been disconnected from the rest of the world, crypto-integrated payment solutions have been a huge relief. Payments of subscriptions for platforms like Netflix, Spotify, and educational courses have now been made easy through crypto payment platforms like Gnosis Pay and Paypal.

Salary Payments

Many forward-thinking companies are now offering employees the option to receive their salaries, or a portion of them, in cryptocurrencies like ether (ETH):

• Gipsybee: is an organisation that deals in electronics, robotics, game creation and other services. They give employees the option to get paid in Ethereum.
• SC5: This Finnish company was one of the first to offer salaries in Bitcoin, paving the way for similar arrangements with Ethereum.
• Blockchain startups: Many companies in the blockchain space naturally offer cryptocurrency salary options to their employees.
• DAOs: Due to the peculiarity and diversity of contributors to DAOs, most contributions and salaries are rewarded in cryptocurrency.

This trend particularly appeals to remote workers and digital nomads who can benefit from borderless payments and potentially favorable exchange rates.

Global relief efforts

In February 2023, when devastating earthquakes struck Turkey and Syria, the global crypto community sprang into action. Various campaigns were launched to collect funds for relief efforts, showcasing the power of Ethereum in times of crisis. Despite crypto not being a recognized form(opens in a new tab) of payment in Turkey, authorities made exceptions(opens in a new tab) for some organizations to collect donations. Some examples are:

• Refik Anadol(opens in a new tab): is a renowned digital artist who initiated a fundraising campaign.
• DAO Power: Anka Relief DAO(opens in a new tab) and Bankless DAO(opens in a new tab) joined forces with Giveth(opens in a new tab) to raise funds.
• Pak(opens in a new tab), a prominent NFT artist, also contributed to the cause.
• Even Ethereum co-founder Vitalik Buterin(opens in a new tab) made personal donations to multiple campaigns. The result of this? Over $6 million was raised in a matter of days, as tracked by a Dune(opens in a new tab) Analytics dashboard.

There were also similar response times for tragedies that happened in India and Ukraine. This rapid response highlights a crucial advantage of Ethereum payments, which is the ability to quickly mobilize global support without the hurdles of currency conversion, lengthy bank transfers, or exorbitant fees.

Ethereum vs fiat

To truly appreciate the impact of Ethereum payments, it's worth comparing them to traditional fiat currencies:

At its core, Ethereum is a decentralized platform that allows for secure, fast, and transparent transactions. However, many components set it apart from traditional payment methods. Let's dive into the benefits that make Ethereum payments a game-changer:

Programmability

One of Ethereum's unique features is its ability to support smart contracts. Smart contracts are self-executing agreements with the terms directly written into code. This opens up a world of possibilities for automated, condition-based payments that can greatly improve transactions like:

• Escrow services
• Recurring payments
• Performance-based compensation

Speed

Do you remember the last time you waited days for an international bank transfer to clear? The long queue? And the multiple forms you had to fill? With Ethereum, those days are long gone. Transactions on the Ethereum network settle in minutes, regardless of where the sender and recipient are located. Due to Ethereum being permissionless, there is no regulatory bureaucracy when sending money. This speed is particularly crucial in time-sensitive situations, such as emergency relief efforts.

Lower Fees

Traditional international money transfers fees sometimes eat up a significant portion of the amount sent, especially when dealing with transactions in the hundreds of dollars. Ethereum transactions, while not free, often come with lower fees. This means more of your money goes where you intend it to, rather than lining the pockets of intermediaries.

Transparency

Every transaction on the Ethereum blockchain is recorded on a public ledger. This means anyone can verify the movement of funds, making it an excellent tool for:

• Charitable organizations to demonstrate how donations are used
• Businesses to prove payments to suppliers or employees
• Individuals to keep track of their financial activities

With Ethereum, everyone can see how money moves and how costs are implemented, unlike traditional organisations where most of these remain unknown.

While fiat currencies have the advantage of widespread acceptance and stability, Ethereum offers unique benefits that make it an attractive option for certain types of transactions.

From facilitating rapid disaster relief to empowering global workers, Ethereum payments are writing a new chapter in the long history of money. While challenges remain, the unique advantages offered by this technology make it an attractive option for a wide range of use cases.