Bitcoin for Payments Shrinks This Year
It appears that Bitcoin is not being used for its intended purpose. Reports from Reuters shows that the places that accept Bitcoin for the purpose of commercial payments have drastically dropped this year. This report is coming at a time when the original cryptocurrency is beginning to achieve stability, a basic feature of any currency used in payment.
Data from Chainalysis, a blockchain researcher, reveals that “the value of Bitcoins handled by major payment processors shriveled nearly 80 percent in the year to September.” This points to the fact that Bitcoin is finding it difficult to switch from a “speculative asset to a serious alternative to state-issued money.”
Several months of relative calm in the highly volatile cryptocurrency market had fueled hopes that Bitcoin would be widely accepted as a means of payment. But this was not to be. The collapse of the cryptocurrency as a mode of payment has led to “big finance and crypto insiders eyeing better technological infrastructure to aid the cryptocurrency [to] take off as a way to pay.”
According to UBS strategist, Joni Teves, “There would have to be a stability requirement if it is to become another form of money. But one thing that would take Bitcoin into the mainstream is scalability – is it able to process the value or volume of transactions that money tends to do?”
For those who don’t know, the current blockchain technology, which records and validates all Bitcoin activity, has the capacity to process “a fraction of the transactions per second that major credit card companies can.” This is one major reason why Bitcoin has not gained mass use.
In addition, the 30 percent plunge suffered by Bitcoin this week shows that the cryptocurrency is still far from being seen as stable. However, this month’s run is in sharp contrast to last month where Bitcoin was more stable than stocks in the US
But in spite of the increased stability, data from Chainalysis revealed that “the value of Bitcoin payments collapsed to $96 million in September from a December high of $427 million.”
As part of its research, Chainalysis surveyed 17 Bitcoin payments processors including one of the biggest – BitPay.
In conclusion, the dream of Satoshi Nakamoto that foresees Bitcoin as a serious alternative to fiat currency is fast eroding. Research by Chainalysis revealed that the usage of Bitcoin as a form of commercial payments has seriously dwindled this year.
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