Despite originally being conceived as a new form of payment, crypto has mostly failed to take off as such, instead proving more attractive as an investment asset. However, thanks to developments in the markets and underlying technology driven by regulated payment platforms like Blocktrade, the original utility of Bitcoin and other cryptocurrencies is now seeing a resurgence. 

The first line of the Bitcoin white paper makes a reference that leaves no doubt as to the original intention for what the first cryptocurrency would eventually become: 

“A purely peer-to-peer version of electronic cash [which allows]online payments to be sent directly from one party to another without going through a financial institution.”

By most measures, Bitcoin has been wildly successful in the decade and a half since Satoshi wrote those words. As of 2024, it’s thought that over 50 million people worldwide own some BTC, including 22% of the adult US population. However, measured by the extent of its use as a medium of payment, Bitcoin and cryptocurrencies have had a more difficult path to acceptance. For example, one consumer survey carried out by the Reserve Bank of Australia found that only 2% of respondents had used cryptocurrency to make a payment in the previous 12 months. 

Why Not Crypto? 

The fact is that even if people have crypto, it doesn’t necessarily make an attractive, or even viable option, for the parties on either side of a payment transaction. In the case of BTC or ETH, the blockchain transaction fees alone make it an expensive option for all but the largest purchases, meaning that most consumers would automatically choose a cheaper way to pay.  

On the merchant side, while volatility makes digital assets appealing for the opportunity of high returns, a seller can’t afford to bear the downside risk with their own livelihood. Transaction times can also be an issue since even once a transaction is processed, it’s not considered “final” until enough blocks have passed to make sure that the blockchain cannot be reversed. In Bitcoin, this can take up to around 30 minutes, which is an unacceptable waiting time for many payment types – including almost any payments made in brick-and-mortar businesses. 

It’s also worth bearing in mind that if we consider a blockchain like Bitcoin as a standalone payment system, it’s effectively competing against all other payment system providers on the market. This includes established fintech giants such as PayPal, which already have a considerable edge when it comes to factors such as marketing budgets and product development. 

However, payment providers also offer a key benefit, making them highly adoptable – as a merchant, you can sell your goods or services to anyone in the world, and the transaction will let your customer make the payment in their own domestic currency, and you can get paid in yours. 

Breaking Down Barriers to Payments

There has always been a strong will among the crypto community to make payments a viable use case for cryptocurrency. Faster, more scalable blockchains with lower or no gas fees have made a significant contribution to improving the overall user experience, while the sector has also listened to the concerns of both users and merchants to the extent that near-seamless transactions are now a reality, using crypto payment solutions like Blocktrade. The project is a gamified platform for enabling seamless buying and selling of crypto with no trading fees. 

However, unlike many crypto exchanges, Blocktrade isn’t only focused on B2C solutions. It has developed a payment platform that facilitates crypto payments, which are settled within ten seconds. Payments are made via the Blocktrade mobile app or a dedicated point-of-sale machine, which Blocktrade also provides in partnership with technology partner SKAi2. Unlike Visa and Mastercard payments, which take several days for the money to arrive, the merchant receives their funds almost immediately. 

As an incentive, Blocktrade also offers 5% cash back on every purchase made using its solution, which has undoubtedly contributed to its adoption success – Blocktrade Pay has already been adopted by 500,000 shops globally. The project is registered as a VASP in the EU via regulators in three countries, Estonia, Italy, and Slovenia, providing a full assurance of compliance with AML 5 guidelines. 

While Satoshi Nakamoto may have envisioned Bitcoin as a payment system that could stand by itself, the reality is that it could not compete against the centralized payments segment in areas such as user experience, development, and compliance. However, supported by initiatives with the technological capability and desire to make crypto a viable way to pay, BTC could finally fulfill its promise as an alternative medium of exchange. 

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Filed under: Bitcoin - @ February 8, 2024 3:26 pm