What if cryptocurrencies were used to pay for much more than we think?
This is what Ethereum blockchain chief Vitalik Buterin believes, referring to international transfers, donations or payments within countries.
As a merger event looms for the Ethereum blockchain, its boss Vitalik Buterin continues to be a spokesperson for the cryptocurrency ecosystem. After supporting the interest of cryptocurrency “mixing” service Tornado Cash, which is experiencing unprecedented upheavals, the latter believes that cryptocurrencies are used much more than we think… as a means of payment.
“People still underestimate how often cryptocurrency payments are superior, not even because of censorship resistance, but simply because they’re so much more convenient,” he said last Wednesday on Twitter.
He specifically mentioned international transfers, “donations” and “sometimes even” payments within countries. It is true that many cryptocurrency donations have been made to Ukraine to help it resolve its war with Russia. According to the data he collected Elliptical reference platform, the country thus received 63 million donations in cryptocurrencies, mainly from personalities in the ecosystem (Vitalik Buterin, but also “CZ” the head of the Binance platform). Abroad, only El Salvador, which accepted bitcoin as legal tender in September 2021, allows its citizens to be able to make purchases in bitcoin.
But apart from this country and possibly soon the Central African Republic which is ready to accept bitcoin as legal tender, countries remain cautious on this issue. In France, for example, it became a Beaugrenelle center a few months ago the first mall to accept payments in cryptocurrencies, thanks to a partnership with fintech Lizy. The experience that happened this summer should be repeated at the beginning of the school year. But according to the newspaper article Echoesthe experience would not bear fruit.
There are still some obstacles
Indeed, despite the words of Vitalik Buterin, the fact is: cryptocurrencies are still struggling to become a real means of payment. Although there are slightly more than 200 wallets in the world that hold cryptocurrencies, there are still certain obstacles to their use: price volatility (we saw it with the last two cryptocurrencies), the vagueness of the regulation of this sector or due to the still high transaction costs on the blockchain.
In addition, transactions on Bitcoin or Ethereum blockchains remain much lower than those on traditional payment systems, such as Visa or Mastercard. As indicated Cointelegraph, the Bitcoin blockchain for example this Wednesday processed around 5 transactions per second with an average fee of $0.89, while Ethereum processed around 29 transactions per second with fees of around $1.57. For its part, Visa claims to process 24,000 transactions per second, charging between 1.4 and 2.5% per transaction.
However, the ecosystem of cryptocurrencies is in full development to promote the increasing adoption of these assets. Initiatives appear regularly to enable their use as a means of payment. The latest announcement so far, a partnership between American payments giant Mastercard and Binance, which aims to enable users to pay at more than 90 million Mastercard-enabled stores. The first experiment has just been launched in Argentina and should be expanded to other countries if successful.