Satoshi Nakamoto would be delighted to witness the current state of bitcoin. The 15-year-old cryptocurrency, which has been used for speculation and a hedge against inflation, is finally fulfilling its original purpose: payments! There are mounting indications that it is making progress in this direction.
Despite the turbulent nature of cryptocurrency, rapid progress has been made in establishing crypto payment systems. As Richard Mico, U.S CEO of Banxa – a specialized provider for payments and compliance infrastructure- states: “The development in terms of building out crypto payments has continued apace, even if it’s gone somewhat unnoticed.”
Why Satoshi is Bitcoin Hasn’t Become a Global Payment System Yet
Despite the vision of Nakamoto’s 2008 “Bitcoin: A Peer-to-Peer Electronic Cash System” white paper, cryptocurrencies have not yet come to fruition. Factors such as erratic pricing fluctuations, sluggish transaction speeds, and sustained regulatory unpredictability make it unreliable for payment. As a result, very few merchants accept cryptocurrency exchange as tender in their stores.
Advocates of bitcoin claim that it provides a faster and more affordable way to send money, particularly internationally. In addition to bitcoin, other cryptocurrencies, such as stablecoins, have become popular choices for making cross-border payments and remittances. For countries struggling with devaluation or inflation, these cryptocurrency options are even more appealing due to their stability relative to traditional currencies.
Last month, Stellar – a blockchain that facilitates international payments – saw its trades surge to 103.4 million from the 50.6 million recorded in January 2022. In particular, CryptoCompare data revealed an impressive 232% and 72% rise in exchanges between bitcoin and Turkey’s lira and Brazil’s real, respectively!
Can Blockchain Take the Stress of the Global Payment System?
Though crypto payments have had a significant rise in popularity, there are still areas of concern to consider. One major point is if blockchains can handle thousands of transactions at once without an unanticipated surge in fees. Additionally, the introduction of digital currencies by some world powers such as China, Japan, and India could potentially limit further growth in this sector; however, others believe it highlights blockchain’s status as a lasting technology for payments moving forward.
Despite recent market fluctuations, numerous traditional financial firms remain undeterred in their efforts to accept cryptocurrencies as payments. Visa recently entered into a partnership with WireX this month, granting them the ability to offer crypto-enabled debit and prepaid cards. Mico at Banxa noted that “Crypto is quickly becoming an attractive option for individuals worldwide,” signifying its ever-growing presence within the world of finance.
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