Bitcoin In Payments becomes "Distant Dream"
According to data from Chainalysis, redirected through Reuters, the value of the US dollar (USD) of Bitcoin transactions processed by the main payment processors of this market (BitPay, CoinPayments, etc.) has decreased dramatically, indicating that the use of along with the value of BTC the value could be a fiction.
Chainalysis, one of the leading crypto-centric analytical startups, revealed that from 1 January 2018 in September, the aforementioned figure was hit by 80%, which is comparable to the collapse of 70% of BTC in the same period. To put this collapse into a much-needed perspective, at the end of December / beginning of January, over $ 427 million in BTC were treated in retail payments. Now, a little less than a year later, that figure fell to only $ 96 million.
While the last data is not something to be sneezing, the fact that such a collapse has occurred, even if BTC has found some semblance of stability in recent months, is not a promising signal, at least for the short-term prospects of this market.
Speaking of these statistics, JBS Teves, a London-based UBS strategist, probably referring to the most recent crypto recession and the lack of blockchain scalability solutions, noted:
There should be a stability requirement if it wants to become another form of money … But one thing that would bring the bitcoins into the mainstream is scalability – it can process the value or volume of transactions that money tends to to do?
While the previous point can be solved through the rise of stablecoins, who have undergone a "bull rush" over the last two months, and the presence of institutional actors, this is obviously a concern for a handful of industry experts .
For example, Joey Krug, a co-founder of Augur, transformed Pantera Capital's executive, stressed that the lack of scalability solutions is directly detaining cryptographic assets.
Although the cryptosphere has just begun to walk on its two legs, Krug explained that climbing blockchain networks, while it is difficult, is something that innovators within this industry can get with a touch of elbow grease, grit and determination. While he was hesitant to declare that the Bitcoin mainchain, probably the pinnacle of the crypto evolution, will reach thousands of transactions per second, the industry expert noted that eventually there will be blockchain networks that can overcome today's centralized ecosystems.
Underlining the importance of scalability, Krug declared:
If you look on the Internet, it's easy to say, "Well, just create an app, get some users and then fix scalability issues." But, here, these are all markets, so if you do not have scalability, you do not have a market maker and therefore you have no liquidity.
Keeping this point of view, Pantera's manager added that the correct scalability of the current blockchain networks will drive the next cycle of exponential and stunning growth of the cryptographic market, which according to Krug will increase the values of digital resources by 10 times.
However, the fact is that the use of Bitcoin in retail payments has not yet arrived, despite the cries that BTC is the future of money.
Do not be afraid, The Lightning Network is Here
However, some have claimed that the figures of Chainalysis and the sentiment mentioned above are nothing but unbridled and senseless FUD. Just recently, Ethereum World News reported that month by month, the number of Bitcoin transactions in the chain is increasing and a solid percentile.
In addition, even under the bear market conditions and unexpected sales, the Bitcoin Lightning network has seen unprecedented growth. Lightning, a scaling solution that aims to offer near-feeless, near-instant and low impact bitcoin transactions to consumers, traders and institutional actors, has seen its network capacity increase 200% in recent months, approaching $ 2 million milestone in throughput.
Ed Cooper, head of Revolut's cryptocurrency, noted that Lightning may be a turning point for BTC, which was beaten to hell and returned in the last year. Cooper told Reuters:
Lightning solves some of the bitcoin scalability problems … It is receiving payments in kind, [and] in the network.
So, with the widespread adoption of the Lightning network probably a few months away, there's a chance that today's cryptic cryptic investors do not need to sit on their hands for too long.
Title Image courtesy of Andre Francois Via Unsplash