Daily Management Review

Bitcoin Still Far From Being Considered A Payment Currency


11/20/2018




According to data from blockchain researcher Chainalysis, there has been a drastic fall in number of instances of the digital currency bitcoin being used as a means of commercial payments in 2018 even though the crypto currency has been able to attain stability which is one of the most important characteristics of any payment currency.
 
So far this year, there has been drop of almost 80 per cent in the value of bitcoin that have been used by the major payment processors, shows Chainalysis data. This is indicative of bitcoin being far away from being considered to be a serious alternative of present currencies and being viewed more than just a speculative asset.
 
Here were however hopes among a section of investors and analysts that bitcoin could be largely used for general payments because of the relative calm viewed in the digital currency in term so fits prices so far this year compared to the wild volatility in the asset last winter.
 
But the big finance and crypto insiders are now seeking out better technological infrastructure to aid the digital currency to be better accepted as a valid means of general payments because of its failure to be competent to be used as a payment currency.
 
“There would have to be a stability requirement if it is to become another form of money,” said Joni Teves, a strategist at UBS in London.
 
“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?”
 
Only about a fraction of the transactions every that major credit card companies can is possible the blockchain technology where all bitcoin activity is recorded and validated. Hence it would be impractical for mass us.
 
There is still quite a bit of volatility in the price of bitcoin – evident in the drop in of 30 per cent in the digital currency this week. However, for a brief period last month, the digital currency was considered to be more stable than the financial markets in the U.S.
 
According to data from Chainalysis, compared to a high of $427 million that the value of bitcoin payments reached in December last year, the value dropped to $96 million in September despite of the hat growing stability of the digital currency.
 
The analysis was done through a survey of 17 bitcoin payments processors which included the largest one - Atlanta-based BitPay. Bitcoin is not directly accepted by most merchants who accept it as a mode of payment but instead route them through intermediaries such as BitPay which transforms bitcoin into equally valued fiat currencies.
 
There is no comprehensive data on the use of bitcoin as a method currency because such data typically combined the trading of bitcoin with other currencies along with the use of the currency for commercial payments.
 
(Source:www.reuters.com)






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