As more eCommerce stores continue to accept bitcoin as a form of payment, bitcoin payments are becoming a hot topic in the cryptocurrency community. However, businesses outside of the online retail sector, such as restaurants, hotels, and ATMs, are also embracing adoption.
As of March 9, 2021, quick service and casual dining restaurants lead the ranking of businesses that either have a cryptocurrency ATM or accept cryptocurrency as a form of payment in-store, according to Statista. Next in line are lodging and IT services, with 1,159 and 1,129 businesses, respectively.
The businesses included in the ranking include both large and small businesses, as well as retail chains and gas stations. This begs the question of whether major corporations are amenable to the use of digital currency. In February 2021, Tesla declared that it was debating whether to accept Bitcoin as a direct payment method for its Model 3 cars. This was a significant change since some large firms had previously utilized intermediary services.
In terms of transactions, Statista revealed that as more people became interested in Bitcoin, the volume of transactions per day peaked at the beginning of 2021. In December 2020, there were about 330,000 daily Bitcoin transactions, and early in January 2021, there were about 400,000. There were about 250,000 Bitcoin transactions every day as of June this year.
Daily global transaction history of bitcoin (BTC) as of July 6, 2021 – Source: Statista
Can Bitcoin payments, though, eventually become the norm from a mainstream perspective?
Major Obstacles
The adoption of Bitcoin payments will face some difficulties, according to Dion Guillaume, the global head of PR and communication at Gate.io, who was speaking with Finance Magnates.
“The issue with Bitcoin payments is that no one actually enjoys using their BTC for purchases. I assume nobody wants to succeed the pizza guy. That is the main issue with using Bitcoin as a payment method, and that is why, in the short- to medium-term, stablecoins may be preferred over Bitcoin as a payment method.
Guillaume mentioned some businesses that are currently making it simpler to set up Bitcoin payments, which is supporting this adoption: “However, companies like Strike and BitPay have made Bitcoin payments much simpler. Receiving Bitcoin payments is made simple for businesses by BitPay. Strike has done a fantastic job of integrating Shopify and BTC payments in the interim. So, I suppose a combination of infrastructure issues and BTC’s scalability problems pose the biggest obstacle to the widespread use of Bitcoin payments. Strike’s or anyone else’s Lightning Network could greatly improve control over the latter.
Bitcoin transactions in developed nations
Frank Corva, a senior analyst for digital assets at finder.com, discussed with Finance Magnates the difficulties in getting people in developed nations to accept Bitcoin payments. “Because citizens of industrialized nations like the United States, the majority of European nations, and Japan enjoy the benefit of having relatively stable currencies, these citizens don’t have a compelling reason to use BTC as a medium of exchange in these jurisdictions. “More people [will] choose to use US Dollar-pegged stablecoins than BTC if they choose to use cryptocurrency as a method of payment, even in countries like Argentina that are experiencing high national currency inflation,” he predicted.
In addition, Corva discussed the taxation issue and the role that ignorance played in the adoption of Bitcoin as a method of payment in transactions: “More than half of Americans say that they haven’t invested in an asset like BTC because they don’t understand it. Getting such a group of people to start trading in a resource they don’t understand would be challenging. Another problem with using Bitcoin for transactions is that you frequently have to pay capital gains tax when using it. Imagine having to keep track of every Satoshi (a unit of Bitcoin) you spend and then compare the cost of those Satoshis (abbreviated Sats) to the cost of your purchase in order to properly calculate your capital gains tax. This would be a major inconvenience.
How does the Network fare?
Kent Barton, Lead in Tokenomics at ShapeShift DAO, explained the main issue the Bitcoin network is currently facing in an interview with Finance Magnates.
“13 years after its launch, Bitcoin still hasn’t attained widespread acceptance for regular payments. The main difficulty is scaling permissionless payments on the network without imposing prohibitively high fees on users. Currently, a transaction costs about $1.80 in “miners fees.” Because of this, it is too expensive to use for typical retail transactions like purchasing a cup of coffee or a bag of groceries, according to Barton.
A world in which Bitcoin gradually, and then rapidly, replaces fiat currency around the world is what he called the “hyper-bitcoinization” dynamic, which many Bitcoiners believe is inevitable. He continued by saying that the long-term outlook for Bitcoin payments is centered around the eventual failure of central bank currencies.
Literacy is essential for advancing the acceptance of Bitcoin payments, according to all the experts. Additionally, mainstream businesses that wish to adopt this method of payment in order to better serve their customers and provide a seamless crypto payment experience comparable to that of fiat payments are also interested in network improvements.
