As Bitcoin continues to grow in popularity, it has recently reached a significant milestone. Transaction volumes on the decentralised network have surpassed those of global payments giant Visa. However, before we celebrate this victory, let’s take a close look at some crucial aspects. These are often overlooked when comparing crypto-currency networks with traditional payment systems.
What is the true indicator of crypto currency adoption in retail?
It should be noted that not all transactions carried out with the cryptocurrency are necessarily representative of mainstream use. Nor could we conclude from the widespread adoption by merchants. In the case of Bitcoin, much of the network’s activity over the past year has come from Ordinals. Ordinals is a protocol for assigning a unique identifier to satoshis in the blockchain. It allows transactions to be carried out with additional data (such as images).
However, the volume of Bitcoin transactions is impressive. However, this does not mean that Bitcoin is being widely used in retail. Nor does it mean that the cryptocurrency has been adopted as a common means of payment. On the other hand, this increase in transactions highlights the versatility and constant evolution of the Bitcoin network. It also shows that BTC is adapting to different use cases.
Comparing Visa and Bitcoin: why is it tricky?
First of all, there are fundamental differences between centralised payment systems such as Visa and decentralised networks such as Bitcoin. Visa transactions are generally limited to payments made to merchants accepting this payment method. Bitcoin transactions, on the other hand, can cover anything from a coffee purchase to a multi-million euro transfer.
In terms of transaction volume, the decentralised nature of Bitcoin must be taken into account. The total number of transactions on the Bitcoin network can be affected by various external and internal factors. These factors make it difficult to make a direct comparison with a traditional player like Visa.
The scalability issue
- Transaction fees : Over the years, transaction fees for crypto-currencies, particularly Bitcoin, have increased due to increased demand and limited block capacity. These additional costs can sometimes make it less attractive to use Bitcoin for small, routine transactions.
- Regulatory issues : As the crypto-currency market is still relatively new, it remains subject to potential regulatory changes in several countries. Regulators continue to scrutinise the sector, and this could have an impact on the volume of crypto-currency transactions in the future.
A significant milestone for Bitcoin, but there’s still a long way to go
Although surpassing Visa’s transaction volume is a big step for Bitcoin, this event should be analysed with caution. It is important to remember that Bitcoin’s main objective as a decentralised network is not necessarily to compete with traditional payment systems. Rather, it is to offer a viable and innovative alternative for those wishing to use blockchain technology in various financial and non-financial applications.
We imagine that Bitcoin could eventually revolutionise the global payments market. But for this to happen, there will need to be better integration between merchants and consumers. It will also require consistent regulation and constant improvement of the underlying technologies. Nevertheless, reaching and exceeding the volume of Visa transactions is a promising sign. It shows that interest in cryptocurrency continues to grow as we move towards a more digital and decentralised future.
