Cryptocurrencies have long been compared to traditional systems. An area that was most compared is that of transactions, as consumers did not see the need for Bitcoin when existing payment systems already produce a great number of transactions per second. This is all about to change as a recent report shared by Crypto Slate revealed that Bitcoin’s annual transaction value has surpassed that of PayPal’s.
ARK Invest’s cryptoassets analyst, Yassine Elmandjra shared a bar chart that compared ‘Annual Bitcoin Base Layer Transaction Count’ of Bitcoin against different credit card companies such as Visa, UnionPay, MasterCard, Discover and PayPal. As per Elmandjra’s analysis, which looked at transaction value rather than its volume, Bitcoin is “an order of magnitude away from Visa,” adding that it has already overtaken the likes of PayPal and Discover.
Bitcoin still has a long way to go as its current $1.3 trillion transaction value is nowhere near Visa’s $8.9 trillion in 2016. However, instead of simply looking at volume, it is also important to assess market capitalization, where Bitcoin managed to achieve nearly ‘eightfold increase in transaction value,’ as per Crypto Slate. If the trends continue every year for the following years to come, Bitcoin has the potential to overtake Visa by 2022.
Bitcoin has always been perceived as an alternative to several payment systems in place, that is in terms of scaling high transactions, however, Elmandjra tweeted that Bitcoin’s transaction volume “was never supposed to” match that of Visa’s.
Since Elmandjra’s post, many Twitter users have questioned the legitimacy of his findings. One particular user noted that most of bitcoin transactions are based on “speculative trading”, making it unreasonable to compare it to Visa, which the user noted is based on use cases.
The user, dubbed, “antiprosynthesis”, believes a more suitable comparison would be that of the “trade volume of VISA shares.”
Another user, “Mary Bent”, shut down the prior comment by simply saying, “Bitcoin Protocol moves money. Visa moves money. Apples to apples.”
What are your thoughts on Elmandjra’s analysis? Was he right in comparing Bitcoin transaction to that of Visa’s? Share potential problems that may arise from this analysis in the comments below.