Certified Bitcoin Professional Practice Exam

What role do Bitcoin payment processors serve for merchants?

1. They allow merchants to physically store Bitcoin

2. They facilitate the acceptance of Bitcoin without handling it directly

3. They convert Bitcoin to cryptocurrencies only

4. They increase the volatility of Bitcoin prices for merchants

The correct answer is: They facilitate the acceptance of Bitcoin without handling it directly

Bitcoin payment processors primarily serve to help merchants accept Bitcoin as a form of payment without the need for them to manage or directly handle the cryptocurrency themselves. This service is crucial because it streamlines the process for merchants, enabling them to offer Bitcoin as a payment option without needing to understand the complexities of cryptocurrency management, such as private keys and wallet security. These processors typically convert Bitcoin payments into fiat currency, which reduces the risk associated with price volatility in the cryptocurrency market. By managing the conversion and transaction process, payment processors alleviate the burden on merchants who might otherwise find it cumbersome to deal with Bitcoin directly. In contrast, other options describe roles that are not typically associated with Bitcoin payment processors. For instance, the physical storage of Bitcoin is not a service these processors provide; instead, they handle payments. The suggestion that they only convert Bitcoin to other cryptocurrencies is also inaccurate, as their primary function is to facilitate payments in Bitcoin and often convert it to fiat currency as part of the transaction. Lastly, payment processors are not responsible for increasing the volatility of Bitcoin prices. Their role is more about enabling commerce rather than influencing market dynamics.