While American Express Credit Card enables cardholders to make cashless payments on purchases, it’s not a feasible financial solution in a blockchain platform. If ever a cryptocurrency-based credit payment system will be developed by American Express (AMEX), cardholders must have enough digital money in their e-wallet to pay merchants who accept bitcoin or other altcoins like Ethereum, Bitcash or Litecoin.
Both AMEX Credit Cards and cryptocurrencies are cashless methods of payment, yet the former enables acquiring or purchasing of goods or services without requiring immediate cash payment. Cryptocurrencies on the other hand, is cashless in nature, but backed by a blockchain system that confirms there is actual cash involved in every virtual transaction.
A Quick Look at How PayPal Offers Cryptocurrency Services
Even if payment processor PayPal is now offering cryptocurrency services to its customers, the services offered are restricted to buying, selling and holding of digital money within its Cryptocurrencies Hub.
While there are PayPal merchants who accept cryptocurrency as modes of payment, PayPal does not allow customers to make direct payments using digital money of whatever type. Mainly because PayPal’s blockchain partner Paxos, has to confirm the validity of every cryptocurrency transaction through a process that is entirely different from the payment processing method used by PayPal.
Credit cards like AMEX can fit into PayPal’s payment processing system as a service to customers looking to pay a PayPal merchant on credit. After all, AMEX Credit Card holders only have to confirm the validity of their AMEX card online via americanexpressconfirmcard.live in order to have the credit payment processed and approved.
How Does Cryptocurrency Payments Work in a Blockchain Platform
Cryptocurrency as a mode of payment works on the principles of a peer-to=peer payment system (P2P)., where the parties to a specific transaction have direct involvement without the need to pay fees and disclose any personal and financial information. First off, a cryptocurrency e-wallet must have sufficient balance to cover the transaction, which can be verified by way of the blockchain ledger that records all related digital currency movements.
However, the blockchain ledger uses encryptions when recording such transactions, which can take the form of a long chain of encryptions that connect a block of transactions starting from the moment the digital money first appeared in a blockchain ledger. That being the case, the recording system requires solving or determining which encryptions are related as a way of confirming the validity of the cryptocurrency used for a block of connected transactions.
The blockchain system also puts a particular set of encrypted data through a hash function, which as a test, is expected to generate one hash value. If any one attempts to change even a tiny portion of any of the original encryptions, the altered set of encrypted data will produce a completely unrecognizable hash value. Bitcoin for one uses the SHA-256, an established cryptographic hash algorithm.
Supposing a bitcoin user changed a transaction value even by 0.0001 bitcoin, the hash that will be generated by the chain of encryptions would be unrecognizable based on the SHA-256 system . In such cases, the blockchain network will not confirm a digital currency transaction as valid. .