A ‘Ludicrous’ Existential Challenge Presented by Bitcoin
With cryptocurrency growing, and analysts believe that cryptocurrencies are potentially disruptive to private payment systems like PayPal and Visa. Traditional payment systems like Visa, Paypal, Mastercard believe that cryptocurrencies will never be able to replace them. Paypal and Visa have presented with an eventual challenge from bitcoin and crypto that incumbents are not impossible.
The price of Bitcoin has been falling significantly since December 2017 which was at around Rs. 14,18,200, i.e., $ 20,000 and there is a lot of progress to do to reach the mainstream means of payment. However, once the bitcoin and cryptocurrency users and the user experience increases, it would indeed pose a threat to the traditional means of payment and that cannot be ignored by the conventional payment systems.
Lisa Ellis, an analyst of MoffettNathanson says, ”Why would I ever buy coffee with bitcoin?” Which was first reported by financial newswire Bloomberg. But it could eventually happen, “as ludicrous as it may sound.” She adds.
Traditional means of payments take a few seconds to complete thousands of transactions whereas the cryptocurrencies take a longer time. In comparison, Bitcoin takes around 10 minutes to complete a single transaction. There is proof that other cryptocurrencies are being used in payments instead of the traditional ones in countries like Venezuela. Also, Bitcoin is trying to improve with the help of Lightning Networks to speed up the transaction time and also to reduce the costs of Bitcoin transactions.
Lisa Ellis also says, “Cryptocurrency systems (e.g., bitcoin, ethereum, ripple) are potentially disruptive to private payment systems,” “Their core design characteristics—which are aimed at enabling ‘freedom of money’—are in direct contrast to the characteristics of most traditional, private payment systems.”
So readers what do you think will cryptocurrency be able to make their way into means of mainstream payment? Let us know your thoughts by commenting below.