How Big Of A Threat Is Bitcoin To Payment Services Like Paypal And Visa?
Is Bitcoin As A Minor Threat To Services Like Paypal And Visa?
Bitcoin could certainly be considered an underdog. The cryptocurrency, which was created around 10 years ago, was largely disbelieved for a long time and only recently rose to prominence. Maybe because of this, companies like Paypal and Visa are not feeling very threatened by Bitcoin and, as recently reported by Forbes, neither are some specialists in the area.
Even with the prices of the token going up to as much as $20,000 USD between 2017 and 2018, cryptos are still largely seen by the industry as speculative assets without any real value, especially as their price started to decline in 2018. With the recent bear market, a lot of people have lost faith in Bitcoin.
However, MoffetNathan analyst Lisa Ellis has recently affirmed that the “threat” of Bitcoin should not be ignored as the token is slowly but steadily rising in prominence, importance and usage.
According to her, there is no reason to use Bitcoin to buy a cup of coffee today but this may happen with time, something that the analyst affirmed that could happen despite “sounding ludicrous”.
This is mostly because Visa and Mastercard, according to her and the Forbes article, are simply better options. These payment providers can make several thousands of transactions in a second while Bitcoin may take around 10 minutes to confirm a single transaction. Even Ethereum, which is faster, only needs 15 seconds.
However, crypto payments are already taking place as something normal in countries in which the traditional systems are failing, like Venezuela, which has a very high inflation rate. Using Bitcoin there is a great way to escape the inflation, then.
With the help of the Bitcoin lightning network, however, the process of using Bitcoin can get even faster and characteristics which make Bitcoin even more attractive like its openness and freedom can also be threats because they enable “freedom of money” instead of the centralization that services like Visa propose.
Some companies are already perceiving that the industry is about to be disrupted, though, so they are starting to do something. JP Morgan, one of the largest commercial banks in the world, has decided to adopt the blockchain technology, for instance, as a way to make payments cheaper and easier.
The company has created JPM Coin, which is an internal blockchain-based digital currency that will be used to speed up payments in the company’s system, especially in cross-border transactions. The crypto was created as an answer to Ripple’s XRP, which has been dominating this area recently.
Will Bitcoin Ever Triumph Against The Current Payment Kings?
What the whole crypto community really wants to know is whether Bitcoin will really triumph or not. The answer is that they absolutely can, this is far from a “ludicrous” notion at all. Bitcoin is a really strong asset and it has been getting a lot of attention lately.
For instance, Jack Dorsey, the founder of Twitter and Square, has affirmed that the Square Cash App will use the Lightning Network for Bitcoin payments soon. Even Elon Musk, the founder of Tesla, is bullish for cryptos.
When the bear market is finally ended and you can bet that this will happen, the sector will finally be free to grow in usage again and there is a good chance that we will see Visa and Mastercard lose their places to cryptos in the next decade.