On-chain is getting to be a common term everywhere and the expense involved is an ongoing topic. But you don’t hear as much about off-chain and how that can spur more sales without the associated fees.
Off-Chain
According to Investopedia.com:
- In blockchain-based cryptocurrencies, off-chain transactions refer to those which occur outside of the blockchain itself.
- Off-chain transactions can work by swapping private keys to an existing wallet instead of transferring funds, or by using a third-party or coupon-based interlocutor.
- Off-chain transactions can entail lower fees, immediate settlement, and greater anonymity than on-chain transactions.
- Depending on the method used, off-chain transactions may eventually have to be recorded on-chain.
Which is why one of the biggest exchanges has made their announcement regarding commercial transactions.
Coinbase
One of Coinbase’s goals is to become a platform that brings together consumers and businesses in the cryptoeconomy. By making cryptocurrency transactions easier and more accessible, Coinbase is continuing to drive towards this goal. One of their key strategic pillars is to build products that enable crypto as a new financial system. Coinbase Commerce supports this pillar by providing access to safe and convenient payments.
Instant and Free Payments:
Earlier this year, Coinbase launched instant and free payments from Coinbase users to Coinbase-Managed Commerce merchants. This new feature leverages Coinbase’s unique access to both Coinbase customers as payers and to merchants as payees to enable instant, free payments using off-chain transactions. An off-chain transaction involves an account-to-account transfer processed outside of the blockchain through a separate channel, which means we can offer this benefit to payers with Coinbase accounts.
Payer Benefits
Consumers have told Coinbase that fees are among the top reasons they choose not to pay in cryptocurrency. Following this launch, existing Coinbase users will be able to complete crypto payments for free if they are sending money to a Commerce merchant on the Coinbase-Managed product, and funds will be settled to the merchant instantly. This makes online and in-person payments even more seamless.
Merchant Benefits
One of the biggest drawbacks for merchants looking to accept cryptocurrency is price volatility. Instant transactions (10 minutes or less) along with auto conversions to fiat currency can help to ensure that you are receiving the right amount from the payer.
Nathan Scherotter, Vice President of Direct-To-Consumer at Commerce client Constellation Brands commented on the company’s excitement about the new capability for the Robert Mondavi NFT store: “Coinbase was the perfect partner for Robert Mondavi to launch our NFT project. The product, team and infrastructure allowed for seamless crypto transactions, automatic conversion and easy integration. Without Coinbase’s Commerce product we would not have been able to accept crypto for this project, and being able to offer instant and free payments is a huge win.”
More Crypto Payment Options on Commerce:
Coinbase also added support for seven new crypto assets on the Commerce platform. Merchants and consumers now have more options for their crypto payments. Coinbase has been getting requests to enable payments with additional cryptocurrencies and they are excited to add this new capability that will meet the needs of both sellers and payers.
Coinbase now supports BTC, ETH, USDC, BCH, LTC, DOGE, DAI, USDT, APE, and SHIB. Merchants can easily manage which cryptocurrencies they want to accept, turn off the ones they don’t, and choose to hold or auto-convert any cryptocurrency balance to USD.¹
By removing friction and increasing flexibility within the crypto payment process on both sides of the ecosystem, Coinbase is taking another step towards mainstream adoption and leveraging the network effect of our brand. Log in to your account to explore these new features. You can also visit their Help Center or contact us if you need support.
Keep an eye out for more exciting Commerce updates to come later this year!
¹Only Coinbase-managed accounts are eligible for auto-conversion. Settlement limits apply for auto-conversions:
- $1M — BTC, ETH, USDC, DAI
- $500k — LTC, SHIB, USDT
- $250k — APE, BCH, DOGE
Via this site.
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