Decentralization remains a key phrase in the evolution of cryptocurrencies, but what happens when these decentralized assets start operating in centralized environments? The answer is not too much, actually.

In fact, centralization is precisely what propels wider adoption and will allow the crypto market to realize its true potential. Below we explore how these two worlds collide and the impact the one has on the other.

The Implications Of A Decentralized Currency

Decentralization is the key component to the origins of cryptocurrency. After the global financial crisis struck in 2008 causing extreme stress in the markets and banking systems, the anonymous entity Satoshi Nakamoto decided to take matters into their own hands.

Bitcoin was created as a response to the centralized, government-controlled currencies around the world and was designed to restore ownership back into the hands of the people.

Instead of holding a currency that was subject to volatility caused by politicians or questionable decisions made by the people in power, Bitcoin allowed users to hold and manage their finances autonomously.

Through the use of blockchain technology, Bitcoin provided an entirely decentralized and digital alternative to the traditional currencies relevant to each country.

Blockchain operates on a consensus-based mechanism where everyone working toward securing the network follows the same protocols. Should one step out of line, there are enough good actors to bypass and eradicate a bad actor’s error.

In a world of increasing geopolitical tensions, a decentralized currency free from political agendas and outright authoritarianism sounds wildly attractive.

Fitting Decentralized Currencies into a Centralized World

From traditional centralized financial markets to decentralized digital currencies, how do these cryptocurrencies then fit back into the global financial landscape? Surprisingly, they do–and with ease. While an entirely decentralized financial system sounds very appealing, the practicalities of this are unrealistic. To bridge the gap, centralized crypto payment platforms entered the scene.

These platforms allow for more seamless and easier integration of cryptocurrencies into the greater financial landscape. With the right tools, the right infrastructure, and a regulatory framework that appeases governments and financial bodies in place, centralized crypto payment platforms are able to provide a more simplified crypto experience for all parties involved.

Another benefit that these payment processors provide is that they don’t use blockchain. The significance of this innovation is  that the movement of crypto is done entirely outside of external networks, thereby reducing the volatility that remains one of cryptocurrency’s enduring obstacles for wider adoption.

For example, when large amounts of a cryptocurrency are sent to another user this will have an impact on the market’s volatility (especially in the case of crypto whales). Therefore, when the transactions take place through a centralized payment solution, these will not have an effect on the asset’s price as a result of the market’s supply and demand economics.

This leads to another advantage that these centralized options provide, and that is that users’ transactions are not traceable. While most cryptocurrencies, with the right amount of information, provide a transparent look at who sent what and where, as the payment processors aren’t operating with blockchain there are no traceable transactions. Only the relevant parties in the transaction will have access to this information.

Integration Is Key

We sat down with Oobit CRO, Dan Stern, and VP Global, Shuan Tan, to discuss the ins and outs of digital payments integrating into modern day living, the regulation aspect, and who's got the most to gain from the integration.

Watch the full video on the ins and outs of digital payments integrating into modern day living.

As cryptocurrencies move into the mainstream, services like these offer a greater use case to all parties involved allowing for better integration. Say for instance a grocery chain wants to start accepting Bitcoin; using a centralized crypto payment processor will be far more reliable (instant transactions, minimal fees) than waiting for the Bitcoin network to verify the transaction.

Another great example is the recently launched Oobit Pay app that allows users to instantly send crypto payments (with no limits on the minimum or maximum amount allowed) to anyone in the world, clearing immediately and incurring zero fees. These transactions have no impact on the market’s prices, and instead, enable cryptocurrencies to reach their true potential in the global financial landscape.

As crypto becomes more mainstream, which side of the equation do you see yourself on? Early adopter or long-term bystander? Explore more crypto related topics with the Oobit blog, where you can learn more about the fast-expanding world of blockchain and cryptocurrencies.

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