Can bitcoin be paid with?
Main page Opinion, Bitcoin, Cryptocurrency
Hot topic
Aug. 7, 2018

‘Starbucks accepts bitcoins’ - that's the piece of news that has been circulated around by mainstream media. The news appeared soon after a partnership was announced between Microsoft, Starbucks, DCG and the largest marked developer ICE, which, among other things, owns NYSE.

However, the news had to be retracted rather soon. Not just because the world-renowned coffee chain is unwilling to accept bitcoin as a means of payment, but due to a much more banal reason - it doesn’t make any sense to pay with bitcoin yet.

We are glad to see that several places appear to accept bitcoin and other cryptos. PR and marketing executives are showing remarkable numbers, hinting, that nowadays crypto should not only be traded or held on to in hope of rapid growth, but also as a means of a day-to-day payment. And when the Swiss start-up, RapidZ, revealed it’s close relationship to a cinema chain in Thailand, where you can now buy tickets and popcorn for bitcoins - the public was ecstatic. But is it too early?

Excluding the darknet, where the desired product is more important than the means of payment, what would you buy for bitcoins? I’m afraid, nothing. Even though bitcoin was created as a means of payment and is being pushed as a currency with which you can pay at every corner of any given street - still cryptocurrency payments are as far away as the moon.

Research start-up Chainalisys has come up with research for Bloomberg, summing up the volumes that have gone through well-known payment systems like BitPay and Coinfy. 69 million in the past month. All over the world. It’s a laughable number. Even if considering, that a year ago the volume of payment companies was at 270 million - when bitcoin was at $1800−2000.

That growth was fueled by countless startups that enabled an issue of a Visa or Mastercard card that would be tied to a crypto account. But the fun was over soon, payment monsters swiftly reversed their decision and brought a prompt end to it. Regardless of who is offering to bring a crypto backed card, to this day no such projects exist. But back then the network was not overloaded and crypto enthusiasts were not replaced by investors and traders.

On the one hand, everything seems to be well: the number of places where cryptocurrencies can be used as payments is on a rise. According to Coinmap, which is trusted by a Forbes journalist, Prague is at the top of the list. But not just Prague. The Australian airport in Brisbane has been accepting bitcoins in duty-free for over a month. Madrid, Paris, London.

In any country that is favorable towards crypto, it’s rather easy to find a spot where you can change the prized crypto for goods and services. Once again, Coinbase, the American crypto market giant, has launched a plugin for the Woocommerce system to which apparently 3 million shops are tied to. If statistics are to be trusted, this only amounts to a media hype and attracting geeks, but does not actually lead to the adoption of cryptocurrencies as a means of payment.

Not just the bitcoin can be used as payment. A premium account on a famous website specializing in adult video content can be purchased with TRON. Against bitcoin and ethereum, other cryptocurrencies are barely visible. Their percentage on the market is so small, that discussing them doesn’t make any sense. The share they occupy is smothered over hundreds of projects. In reality, there is bitcoin and ethereum, and the latter is also far from perfect. Mostly thanks to KryptoKitties, using ethereum as a payment instrument is impossible, the transaction could take up to an hour to process.

In order to replace traditional money or at the very least be on par with it, our favorite cryptocurrency has to be priced at $200,000 for a coin. This is a rather real scenario, but the technical features of the system forbid it from fulfilling that potential in full. «Lighting Network» however intrigues us, as this technology, where some part of the info is taken outside the bitcoin blockchain, should, in theory, increase the volume of the network, increase the transaction speed, and turn bitcoin into a generally new thing. As we hear something like this rather often, we get the feeling that happiness is just around the corner.

The number of nodes supporting the system is indeed growing. But it’s still in the process of full-on development. Suffice to say that thus far only one wallet is supporting the technology. Just compare the transaction speeds of any payment system. Bitcoin cannot compete. And the volume? The Chinese Ant Financial of Alibaba group alone has processed around $8 trillion in 2017. Bitcoin? What bitcoin?

As of now, bitcoin is a commodity. Buy it, hold it, and if you are strapped for cash and the price of purchase is lower than the current trading price, sell it at a profit. But then buy some more if the chance comes up. Those that get caught up in the world of crypto, get hooked on it. So far, bitcoin is an investment tool but not a payment system. But it does develop fast. Even though it doesn’t make any sense to pay with it now, who knows what will happen tomorrow.

The author's opinion may not coincide with the editorial position

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