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Bitcoin Adoption: Bitcoin Use in Payments Dropped in 2018 – Report

A key index for the success of bitcoin and cryptocurrency is generally their effective application of real-life use cases one is making payments.

In this regard, the bitcoin has actually lost ground based on a Reuters report citing a recent study by the research firm Chainalysis.

According to the Reuters report, the use of bitcoins in commercial transactions between January and September fell dramatically compared to the numbers achieved last year.

The Bitcoin payment studio

For his study, Chainalysis examined 17 bitcoin payment processors. He discovered that the amount of bitcoin [BTC] the payment has been processed, the main processes have decreased by almost 80% compared to last year. According to the study, the value of Bitcoin payments rose from $ 427 million last December to $ 96 million in September 2018.

This reduction is also reflected in individual processors such as Coinpayments, a payment processor based in Canada that could handle only half of the bitcoin payments used to manage the OXT blockchain analysis site data.

According to Lex Sokolin, global director of the fintech strategy at the research company Autonomous Next, "Bitcoin payment processing is seeing a slow but consistent decline".

Stability and scalability of Bitcoin

The main factors influencing the use of bitcoins in commercial transactions include scalability, its capacity for bitcoin blockchain to accommodate many transactions over a short period of time and a level of stability.

Bitcoin's volatile price makes it difficult for merchants to accept BTC payments because they and their customers are used to a regular currency that is relatively stable. "There should be a stability requirement if it were [bitcoin] it is becoming another form of money, "said Joni Teves, a UBS strategist in London.

He continued:

"But one thing that would bring the bitcoins into the mainstream is scalability – is it able to process the value or volume of transactions that money tends to do?"

However, bitcoin seems to have reached an acceptable level of price stability, ie before the recent market crash. The report recognizes this growing stability of BTC by noting that it would be instrumental to the widespread adoption of bitcoins for payments.

For a market that is considered volatile, bitcoin has been more stable than US stocks sometimes in the year. Zeeshan Feroz, UK managing director of the Coinbase cryptographic exchange, noted that "the lack of volatility is a good step in the right direction that starts to make it viable for some of the non-retail use cases."

That said, traders exercised caution in receiving bitcoin payments; they often use bitcoin processors like BitPay to convert bitcoin payments into fiat rather than accepting them directly.

Challenges of the adoption of Bitcoin

Reuters also highlighted some important challenges for the mainstream adoption of bitcoin in its first decade of existence.

Joni Teves, a strategist of the London-based UBS financial company, noted:

"To get traction, bitcoins need to be faster and cheaper, they say, clearer rules on a resource that has irritated financial regulators around the world would also contribute to giving users a sense of legitimacy."

Some merchants such as the Microsoft and Steam gaming platform who have accepted bitcoin payments in the past have announced during the year that they would have limited or even stopped accepting bitcoins.

As reported by Smartereum, a study conducted by the Neustar International Security Council in March revealed that about 80% of companies were open to bitcoins in their activities, but were wary of the challenges related to the management of cryptocurrency. Among other factors, companies were concerned about cyber attacks targeted at bitcoin holding companies.

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