Will Bitcoin Ever Be Accepted Widely as a Form of Payment?
In March, Elon Musk announced that Tesla would allow customers to purchase its electric vehicles using bitcoin — but will other major brands follow suit? Will we soon live in a world where you can purchase your next cup of coffee using crypto? GOBankingRates asked financial, banking and cryptocurrency experts to weigh in on whether or not paying with bitcoin will ever be as common as paying with cash — here’s what they had to say.
No, It Won’t Be Adopted Widely Without Government Regulation
“Bitcoin is one of the most successful and proven cryptocurrencies in existence. However, it still lacks the stability that most currencies that are widely adopted need to have,” said Sukhi Jutla, co-founder and COO of MarketOrders, a B2B blockchain-based marketplace for the gold and diamond jewelry industry. “The volatility it has at the moment is due to its speculative nature; it could become more stable if it is more widely adopted and used. For this to happen, we need governments to endorse it and approve of it, and also put in place regulations to protect investors and consumers who want to buy and use this crypto as a currency. Without this protection in place, it won’t get adopted widely.”
However, Jutla is not sure if this will ever happen.
“The tricky part will be how to ensure you don’t create a ‘central governing’ body to administer this, as this goes against crypto principles and values of decentralization,” she said.
Yes, More Companies Will Accept Bitcoin as Payment If Its Value Continues To Appreciate
Bitcoin may become more appealing than the dollar to some companies, said David McCarville, trusts and estates attorney at Fennemore Craig and a thought-leader in blockchain and cryptocurrency.
“Bitcoin will be widely accepted as a form of payment if it continues to appreciate in value over time,” he said. “Since 2009, bitcoin has performed better than most, if not all, investments over any five-year period. Once more companies embrace bitcoin as a valuable investment tool, these companies will be very comfortable accepting payment in bitcoin. In fact, these companies may prefer to be paid in bitcoin in certain situations, especially in an inflationary economic environment where the dollar depreciates by more than the traditional 2-3% per year.”
No, but Other Cryptocurrencies May Be
There are inherent issues with bitcoin that will prevent it from being used widely, said Lucio Intelligente, a private banker, investor and executive director at REYL Group.
“A digital currency may well become as ubiquitous as the dollar, but I believe it is unlikely that it will be bitcoin due to its enormous power consumption,” he said. “Frankly, I don’t see something that is so environmentally damaging becoming a reserve currency. Furthermore, there is a perception that has been built around transactions made in bitcoin being for dubious purposes on the dark web and it is difficult to change this. Other cryptocurrencies, however, may be better candidates, such as Ethereum 2.0, or a central bank digital currency (CBDC), which is given intrinsic value and therefore will have more stability. Fiat currencies require users to have faith in the institution behind them and CBDCs may be the answer to this.”
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Ran “Goldi” Goldshtein, CEO at First Digital Asset Group, believes that stablecoins could be the future of cryptocurrency.
“I personally have been focusing on stablecoins as I believe those are our imminent future,” he said. “Whether corporate or state-issued, in five to 10 years our financial infrastructure is going to go full digital — just look at China who is way ahead of the western world already.”
Yes, but It May Take a While
Angelo D’Alessandro, CEO of the banking app BELLA, does see a future in which we’ll be able to pay for everyday transactions with bitcoin — but it will take a while for us to get there.
“I think it’s going to take at least another decade or more to see real global usage and acceptance of cryptocurrencies as an international form of payment,” he said. “I deeply believe that the way we see money today is an antiquated way of viewing finances, and I believe we are not too far from a total dematerialization of everything, including the entire financial system.”
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No, Unless It Becomes ‘Boring’
“The dollar is ubiquitous because it’s trusted, regulated and consistent. That’s everything bitcoin isn’t. So no, today’s bitcoin will never be tomorrow’s dollar,” said Howard Dvorkin, CPA and chairman at Debt.com.
He believes that in order for bitcoin to become widely accepted, it would have to become “boring and predictable” rather than “edgy and cool.”
“But bitcoin’s current fanbase wants the currency to be its identity,” Dvorkin said. “That will scare away many big and small investors who sense there’s not a level playing field — because they’re not cool enough to be initiated into the club. Until bitcoin is boring, it won’t be ubiquitous.”
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Yes, and It Could Become More Popular Than the Dollar
Globally, we may see the adoption of bitcoin outpace the dollar, said Neil Bergquist, CEO and co-founder at the digital currency exchange Coinme.
“It is entirely possible that bitcoin will be a widely accepted form of payment,” he said. “As for global adoption of bitcoin vs. the dollar, I think it’s entirely possible bitcoin will be owned by more people than those who own dollars. We’re still in the early stages of bitcoin and as crypto companies drive awareness, education and access, ubiquitous adoption for bitcoin will be close behind. The appetite for bitcoin in emerging markets compared to dollars will be the deciding factor. As of right now, it appears bitcoin is winning.”
No, Because It Isn’t Practical for Making Everyday Transactions
“The problem with bitcoin as a payment platform is that it is too big and too slow to be used for everyday transactions,” said James H. Lee, founder at StratFI, a boutique investment advisory firm. “In order to compete with, say, a Visa card, bitcoin would need to be able to process 50-60,000 transactions per second (TPS). Right now that figure is closer to just 8 TPS. There are some layer-two payment solutions, such as Bitcoin’s Lightning Network, which help payment speed, but much less to manage transactions costs.”
Because of this, it will only ever be practical for making large purchases, like real estate and cars, he said.
“You can buy a Tesla with bitcoin. Houses have been sold for bitcoin, too. But you won’t be buying your groceries in bitcoin anytime soon,” Lee said.
Yes, but It Needs To Be Made More Secure First
“The future of bitcoin is not easy to predict. There are many reasons to believe that it will become more widely accepted, including the entrants in the crypto space by major banks and players like Visa and PayPal, as well as commercial acceptance by enterprises like Overstock, Tesla and Subway,” said Steve Maloney, executive vice president of Acuant, a global provider of identity verification solutions. “However, trust and regulations are the key factors that will enable broader acceptance. Crypto transactions must become more secure before being widely utilized, fostering trust among users. Regulations — like the U.S.’s recently proposed Know Your Customer (KYC) requirements, requesting detailed identifying information of users to be shared with the Financial Crimes Enforcement Network for transactions over a certain amount via crypto exchange — can help to accomplish this.”
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