Obstacle 1: Regulation
Of all the main cryptographic payment assets – Litecoin, Dash, Zcash, Monero et al – Bitcoin is the inflated competitor in the point of sale (POS) sprint with slow transaction times, taxes relatively high and burns more energy than all the others in the race. Yet it continues to dominate the overall capitalization of the encrypted market (53% compared to 12% of Ethereum) and despite being the oldest candidate and clunkino is still in fact an encrypted and omnipresent on exchanges, payment app and may soon appear at the POS terminals at Starbucks stores through NYSE's Bakkt, a partnership between its parent company ICE, Starbucks and Microsoft.
Ari Paul, CIO of BlockTower Capital, estimates that the bitcoin is owned by about 1%
It is not surprising that the bitcoin price is still highly correlated with the volume of daily transactions, particularly since it was traded. at the end of 2017. It could be a difficult relationship to stop because the price and the transactions start moving in opposite directions, what card will a customer use at the cash desk to pay for a coffee – what he pays in a constantly devalued fiat currency or one who increase in value more often do you spend it?
 The volume of daily bitcoin transactions has become highly correlated with its price.
Hurdle 2: SEPA and open banking
The Single Euro Payments Area (SEPA) is designed to allow EU citizens to have only one bank account on the whole continent , which allows customers to use a single card and a bank account for transactions in any EU country. With a population of over 500 million, more than the United States, this is an important market.
In 2016, within the EU there were about 60 billion credit / debit card transactions – about 163 million transactions a day – worth € 3 trillion . Total non-cash payments in the EU exceeded 122 billion in 2016 and will continue to rise only when cash is phased out.
On an account of 200,000 daily bitcoin transactions per day (about the current rate), total annual bitcoin transactions would reach 73 million. Even if bitcoin were to take 10% of the market share of total EU debit / debit card transactions, it would still require an 82-fold increase in its current network load, which it currently can not handle even if it could attract many customers  Open banking solutions and fast payments
Governments around the world are making serious efforts to break up banking monopolies through "open banking" schemes, particularly in the EU, in United Kingdom and Australasia. Open banking is the universal term for a framework that enables the transfer of customer data between financial service providers and technology companies through their APIs, with different iterations around the world. The Australian banking industry is highly concentrated among the "four big banks" (National Australia Bank, Commonwealth Bank, Australia and New Zealand and Westpac), which among them hold 80% of the country market, with a similar situation between their New Zealand affiliates The process flow of the new payment platform in Australia. Since 2014, the Australian government has worked with SWIFT to build its New Payments Platform (NPP) in an attempt to create a completely new financial framework for the country's banks to allow clearing, publication and regulation
Governments around the world are making serious efforts to break up banking monopolies through "open banking" schemes, particularly in the EU, in United Kingdom and Australasia. Open banking is the universal term for a framework that enables the transfer of customer data between financial service providers and technology companies through their APIs, with different iterations around the world.
The Australian banking industry is highly concentrated among the "four big banks" (National Australia Bank, Commonwealth Bank, Australia and New Zealand and Westpac), which among them hold 80% of the country market, with a similar situation between their New Zealand affiliates
The process flow of the new payment platform in Australia.
Since 2014, the Australian government has worked with SWIFT to build its New Payments Platform (NPP) in an attempt to create a completely new financial framework for the country's banks to allow clearing, publication and regulationin real time with the Reserve Bank of Australia to oversee the agreement. Although not built on a blockchain, it is built in a similar "layered" three-tier structure: basic infrastructure, overlap services and fast payments. Similar to a Ripple home network, financial institutions would adopt NPP standards on a fundamental level with merchants and services built on it.
In addition to the United States, other important countries are also in good health with their transition to "real-time" settlements. The UK Faster Payments service has reduced transfer delays between banks from three days to a few seconds; The Singapore G3 payment solution is another example.
The state of national rapid payment solutions around the world, as in the NPP whitepaper.
Banks that open their accounting books for real-time regulation via API are bringing efficiency and user experience to a standard that will be hard to match, and which has also leveled the field of action for small switches at the start. Australians are now able to send and verify transactions via SMS – the proposition to securely store a key of 12 sentences and private and public keys plus all 2 FAs in between has already lost the encryption of the run for adoption by traders and consumers, at least in this heat.
SWIFT is under contract by the Australian government for the next 12 years and there is still no obvious reason why Australian institutions would change.
Hurdle 3: SWIFT
Inter-bank blockchain solutions such as R3 and Ripple are in direct competition with SWIFT ( Society for Worldwide Interbank Financial Telecommunication) for international payments, and while they struggle to convince investors, banks and consumers that their blockchain exceeds the current transfer system have even more to recover with SWIFT while launching SWIFT gpi, a system of tracking payments similar to GPS that all SWIFT members will gradually upgrade to.
SWIFT, similar to an interbank version of Visa, is a network that connects 11,000 financial institutions in over 200 countries.
Emerging markets fight USD hegemony and trade sanctions with crypts
Although based in Belgium, SWIFT has several US banks ex ecutives sitting on its board of directors and because the interbank market is denominated in USD as well as most SWIFT transactions. This has led to a distorted American interest in SWIFT and some countries are seeking independence from the US / SWIFT network.
Germany and France have announced that they are working on their international network that will extend to the rest of Europe to evade the sanctions imposed by the United States on high-export countries such as Russia and Iran that the EU is being swept by SWIFT membership.
Other countries are starting to oppose the dollar monopoly on oil and raw materials and a new system of international trade is emerging. Next to Petro's Venezuelan cryptocurrency, Iran will move this month to avoid US sanctions on oil exports by legitimizing and recognizing cryptocurrency mining as an "official" industry, supervised by the Central Bank. Iranian. It is unclear whether the country will release its crypto-rial but for the moment it seems that Iran will feed the mining crypt with its accumulation of oil stocks as a way to "liquidate" the excess oil that it can not sell on the market.
The status of USD as a global reserve currency has given it an exorbitant privilege for over 70 years, but ideally, the next global reserve currency will not be tied solely to the economic growth and productivity of a country, many to take back the age of the gold standard.
This is usually the case in which we insert the Bitcoin cliché as "digital gold" in the case in question, but the XRP could constitute a true currency independent of the country that serves as a bridge between fiat coins such as Euro and the Russian ruble without having to use USD as an intermediary.
Obstacle 4: payments with Visa cards /
There are about 13 billion payment cards all over the world, which in 2015 reached $ 21.6 trillion in global. The China & # 39; s UnionPay recently passed Visa as the world's largest card payment form for transaction value and number of users and together with MasterCard, all three represent the 89% of expenses world-wide .
Visa already provides a free, cashless way of paying with Paywave technology and integrating it with leading digital payment providers such as Apple Pay and Google Pay customers can wave their iWatch or smartphone in front of to a payment terminal. Currently over 1 million merchants accept Visa through Apple Pay.
Visa is one of the largest companies in the world with a brand value estimated at around $ 145 billion . It has over 20,000 members, mainly banks and other financial services, and is used in over 20 million commercial offices of over one billion people. It will take some persuasion to convert these people for whom transaction times and user experience are not a problem.
The decentralized model of Visa and "Security Token" for IoT
In 1969, Visa was created with a very similar blockchain-like focus on governance such as EOS and Tezos. That is to say, to break the monopoly of financial institutions; solve the dichotomy between selfishness and greed that has stifled progress in their industries and move away from the old hierarchical style of governance towards a more democratic one. Reached an unlikely alliance between the major banks that were attempting but failing to usher in a new financial innovation: credit cards
Visa's governance structure is surprisingly decentralized unifying the rivals together in a whole new business that has joined a common governance structure, as established by Visa, comparable to the bases of governance of blockchain such as EOS, Hashgprah or Tezos. Transaction times are not a problem for the customer who is ultimately where the impulse and desire for a new currency comes from, so what could a Bitcoin Cash or Dash wallet do to improve current experience on Visa?
Visa Ready is the Internet of Things (IoT) company preparation program integrating its payWave and QR scanning technology with mobile devices – smartphones, smartwatches and adaptations etc. – on all operating systems and customers can already pay with a fingerprint and a coup. Other payment apps such as Square & # 39; s Cash App now facilitate the purchase and sale of crypto through third-party exchanges that make encryption more accessible and fungible for customers, but its value proposition for merchants it still remains unclear.
The Visa security token works with Visa as a centralized encrypted token issuer.
What do you think of security? If we believe that cryptography is the only solution for double-expense and compromised transactions, Visa also provides a solution with its token service, a unique encrypted number created for each transaction, which a user can scan their fingerprint on their device by scanning.
With the security token, Visa, similar to cryptos like IOTA, positions itself as a form of IoT payment among the machines: the cars would have a Visa payment app in the entertainment system and will automatically pay for the gas at a station, for example. Visa uses its "tokenization" concept to make IoT payments, taking an account number and assigning its card associated with a digital credential. It seems that Visa is also embracing the jargon of the cryptographic sector ( "token vault") .
Unlike other looming market leaders – Kodak and Nokia – for example, who ignored new technology until it was too late, Visa was taking cryptocurrencies seriously and defending itself on all fronts. It is leading the adoption of the IoT token worldwide through "token service providers" which are third-party companies that connect token applicants (such as merchants holding card credentials) to the token platform – Visa Token Service. TSPs also perform token-related activities on behalf of issuers.
How would the Visa token work between machines in an Internet payment of things.
For much of its existence, until Visa became public in 2008, members were the sole owners and were not shareholders.
Visa is arguably more centralized since it became a shareholder and, together with Mastercard, has often fallen into disgrace with customers and corporations high taxes and has been brought to court for antitrust concerns, particularly an action. collective collection of 1996 brought by 4 million plaintiffs, including Walmart, which cost the company about $ 2 billion in fines.
It could take generations to fully embrace the apparent chaos of an organization that no one "runs" and as admitted by Visa's creator Dee Hock, "at best we have only half done "- maybe a DAO could take it for the rest of the route?  Hurdle 5: Big tech (Apple P ay, Samsung Pay)
Assuming a Bitcoin, Litecoin or Dash can win the hearts of regulators, merchants and consumers, will have to overcome the native payment solutions of big tech: Apple Pay, Fitbit Pay, Samsung Pay and, to the east, the Chinese WeChat and AliPay that are already deeply rooted in the P2P and merchant payments area.
In China, WeChat's mobile payments platform is already half of the world's global mobile payments. In 2017, AliPay and WeChat have processed more value in online payments in a month than Paypal during the whole year. Given the close cooperation between all Chinese mega-companies and the Chinese government, the WeChat and AliPay Tencent and Alibaba parent companies will work for the Communist party line and will continue to ban encryption or payments on their apps while the People's Republic of China installs its own digital currency – this also provides a convenient protective moat around its payment platforms.
Nevertheless, investments are investing in fintech companies, many of which are blockchain / crypto related and 2018 is set to be a record year.
Source: CB Insights Global Fintech Report Q2 2018
Apple co-founder Steve Wozniak, a noisy and fierce bitcoin supporter, is It was also announced to have joined the controversial startup of encryption of Equi Capital funds.
Source: CB Insights Global Fintech Report Q2 2018
Although investments in blockchain companies are growing relentlessly, they are focused on infrastructural space, in contrast to cryptocurrency projects, as evidenced by the loss of momentum in the ICO market.
Source: CB Insights Global Fintech Report Q2 2018
Apple Pay now has an estimate of 250,000 users and the number of cumulative transactions exceeds 1 billion, with 4900 banks that now support customer on-boarding on Apple Pay worldwide. Another huge advantage is that Apple and Google Android have on cryptos and their associated portfolio is that they can be pre-installed on all the world's mobile phones, making them a default option and without the need to remember 12 phrase codes or passwords generated from Google Authenticator.
Obstacle 6: digital banks
Technology is renowned as the land of the unicorns and among its green pastures, the fintech startups, continue to grow in the population. According to CB Insights, there are 29 fintech unicorns worldwide worth about $ 84 billion and only the Q2 2018 has seen the birth of five of them, including the app Crypto payment Circle
Digital banks / payment companies have reached billions of dollars worth apparently from today to tomorrow, many without even having a global presence: Square, Stripe, Adyen, Revolut, Monzo, Twilio and Worldpay are just some of the new millionaires billionaires in the industry, but there are hundreds of similar smaller companies valued in multi-million.
Digital banks / Fintech target cryptos ideal customer: emerging markets
VC loans in Asia have been rising sharply and India has seen an increase in technology investments in the initial phase of VC, addressing small and medium-sized enterprises in emerging markets. In the second quarter of this year alone, $ 16.07 billion was placed in Asian fintech companies through equity financing supported by VC, compared to only $ 3.2 billion invested in US fintech.
Most of the Asian fintech invested are concentrated on the merchant and individual credit / loans, wealth technology and payments. VC investments in blockchain fintech also hit a maximum of 5 quarters in Q2, from $ 179 million in Q1 to $ 633 million
2018 could also be the year of the much-announced "Bank of Amazon", finally realized, with the company that has as its objective the growth of traders in India and Mexico in particular and which invests in several digital bank start-ups in both countries. In Mexico, Amazon has a cash payment service that is an alternative to a credit or debit card. In the United States, it is unlikely that Amazon will try to take retail banks, but there is still concern among them of their potential to combine big data, e-commerce and AI with financial services.
Most digital banks and payment apps offer very similar functions and appeal equally to a millennial generation that makes an encrypted portfolio: low-cost / free global transactions and greater control over their finances to the outside the "system". These startups are more agile using customer data made available to them through open APIs, compared to the same banks, and excel at the user interface with customizable functionality and views for budgeting and forecasts.
Most digital banks allow customers to hold funds in multiple currencies and freely exchange with each other, making free and almost instant transfers. Digital banks exist only as an app and do not offer savings accounts with interest rates that regular banks make even if they issue certain versions of Visa and Mastercard.
Fintech benefits from cryptographic products  By adding their appeal, many payment apps and digital banks have added cryptographic products to their platforms and subsequently saw a surge in their user numbers.
Source: CB Insights Global Fintech Report Q2 2018
The digital bank Revolut and Robinhood trading platform added 1 million customers each since he added cryptographic payments to his app and the social trading platform EToro has tripled his customer base since he introduced cryptocurrency trading. This could also be due to these platforms offering 0% rate transactions. According to financial services giant Charles Schwab, over 50% of US millennials and Gen-Xers would change their brokerage business to trade without commission.
The free trade commission and discounts on trading fees has become a huge driver for many crypts trading grow at explosive rates – particularly in Asian stock volumes
Alibaba's financial debt more than Goldman Sachs
The Alibaba Ant Financial Group, formerly known as AliPay, has also become a global financial powerhouse – among the top 10 banks globally. Although not publicly traded, Ant Financial is valued at $ 150 billion, much more than the Goldman Sachs $ 88b rating. According to CB Insights, its private investment in 2Q 2018 accounted for almost 70% of global investments in fintech.
Chinese technology companies are separated from non-Chinese competition by the government's protectionist policy that has held international giants such as Facebook and Google outside the country. In China, a similarly rigorous anti-crypto policy has been applied that has seen cutting all access to national and foreign encryption exchanges, to the encryption apps removed from the app stores and even to prohibiting all blockchain and crypto-related events in the nation.
Obtaining a cryptographic portfolio, not to mention a point of sale service, active in China will be a very long game.
The Lightning Network at point-of-sale  Without a natural demand for bitcoin will continue to be accumulated and sold purely for speculation and hedging and the price of BTC could continue to make more peaks low: the adoption by traders is essential for this natural demand.
Although details are still scarce, Bakkt could use Bitcoin Lightning Network as a form of BTC payment in a Starbucks store, using for transactions under $ 50 dollars, which is the maximum value for LN being fast and almost free. Coffee is always mentioned as an example of the type of "microtransaction" for which LN was built and the Starbucks coffee app is one of the most downloaded payment apps in the United States, so it's a test field natural.
The Starblocks test site for Lightning Network coffee payments.
To simulate Lightning payments for merchants and customers and how it could work in a real Starbucks store, download the testnet portfolio Eclair Lightning Network on Google Play and address download free testnet bitcoin from a tap. To find out how the wallet works and Lightning Network, take them on the website Starblocks a fake online coffee that supports bitcoins.
LN balancing balancing block for merchants
LN payments under $ 50 will be largely free and instantaneous, however, at the moment it remains a place of block for the adoption by traders – rebalancing of the channel.
Participants in the LN (merchants and customers in this case) must have sufficient funds in both the incoming and outgoing payment channels to ensure that a user has sufficient quantity in their channels to be want to receive or send. A is a total funding limit for each channel and since they can not be "topped up" the channels must be constantly "rebalanced". This means that if A (0 BTC) opens a channel with B (2 BTC), where A spends all of their BTC on transactions with B, the send channel of user A can be rebalanced by B so both have 1 BTC each and A can spend again.
While it is still in beta testing, transaction routing is yet another problem to be overcome by merchants. The simulations for micro LN payments show that among the nodes with at least one channel large enough to route a coffee, the probability that the transaction finds a route is around 70%.
The probability for a successful payment between two random nodes on the LN with sufficient funds for a coffee.
From this chart, 70% is the maximum probability of a transaction $ 3 of coffee ( 0.0004 BTC) has been successful but if we were to lengthen the order to ~ $ 7 (0 , 01BTC), the probability will fall to 10%. The only 100% guaranteed transaction would be $ 0.26 c.
The automatic rebalancing is in progress, but for now, rebalancing a channel would require a trader to track and balance manually – potentially several times a day.
Emerging Markets Remain Larger Use Case
Still, the innovation sparks are flying around the industry that could catch fire in any country.
Fintech venture capital by investing in Asia has grown in recent years; it is well above that in Europe and in the second quarter of 2018 it has almost equaled the North American VC investments. Bitcoin payment app in the US Bitpay has been a great success in the Asia-Pacific for cross-border payments, turning over $ 1 billion into BTC transactions in 2017. It is also working with the Korean exchange Bithumb on a cross-border B2B payment solution for larger transactions while reducing commissions using bitcoins.
In Venezuela, Dash saw a significant increase in wallet downloads and traders recorded a rate of 200 a month, according to Dash CEO Ryan Taylor. Dealers such as Calvin Klein and Subway are among those who have accepted Dash and collaborated with Kripto Mobile Corporation to launch the so-called KRIP phones with preloaded Dash portfolios at a speed of 10,000 units of the phone that will be implemented to consumers every month, which will complete the 1,000 merchants who already accept Dash in the country.
Dash also recorded a 30% increase in the price of Venezuela's adoption news, as it collaborated with Kripto Mobile Corporation to launch so-called KRIP phones with preloaded Dash portfolios with a frequency of 10,000 phones a month , which will complete the 1,000 merchants who already accept Dash in the country.
Other payment apps in the United States Circle and Square will also be the great drivers of crypto dealers' adoption, with Square & # 39; s Cash App touted by Wall Street analysts who have a huge potential for underbanked populations in emerging markets. Last week, Square also won a patent for adding more cryptos as forms of payment to its app.
The most likely scenario at this point is that we will become an emerging crypt as an option for merchant payments between different countries and another for international trade, although the race is far from a foregone conclusion.