Thursday, May 19th, 2022

What are On-Ramp Transactions in the Cryptocurrency Industry?

Investing is the easiest way to get into the crypto industry

With the advent of the personal computer, various terms have found a place in our vocabulary. Some of them are so popular that we sometimes use them by default. For example, we store data on files which in turn are stored in folders. When we open a file, a window pops up. Closing all open windows shows the desktop. Similarly, we use the analogy in the world of cryptocurrencies as well. For example, we deposit money in a wallet (online or offline), which is not actually a wallet but a pair of digital keys required to open the wallet.

As for computers, the parallels to cryptocurrency are also inspired by real life. Consider the process of obtaining or spending crypto coins such as going on or off a highway. These processes are called on-ramp and off-ramp.

How does this work?

The easiest way to get into the crypto industry is to invest, which means you buy coins by exchanging fiat money. Most people do this through an online exchange. However, not all exchangers allow direct fiat purchases. Thus, when you receive crypto coins in exchange for fiat money, you are using on-ramp. When you spend cryptocurrency for something that is not a digital asset, you are using an off-ramp.

Both on-ramp and off-ramp are vital for maintaining the smooth functioning of the cryptocurrency industry. How? Consider this: You work for a company that is paying you partly or fully in cryptocurrency. In such a situation, the company is beating its employees. Typically, employees are fine with this payment system, as most of them want to trade or hold digital assets anyway.

But it can cause problems for sellers who accept crypto payments for their goods and services. These businesses want to get off the highway as quickly as possible after receiving payment in crypto coins. Therefore, these vendors act as off-ramps. Relatively speaking, you are an on-ramp to the vendor and the vendor is an off-ramp to you.

What are the ways to get on the ramp?

Aside from centralized (online) crypto exchanges, there are mainly two other ways to ramp up.

1) Contact your local merchants. But it is no longer in vogue. It is not possible to meet regularly and this requires utmost confidence that traders will not deceive you.

2) Use cryptocurrency ATMs. Crypto ATMs work a little differently from traditional ATMs. In crypto ATM, you need to insert cash into the machine and the machine sends the crypto to your wallet. But, again, this method also has a major problem: there are neither such ATMs nor in all cities.