Bitcoin’s annual settlement volume just surpassed that of Visa, one of the world’s most widely used payment systems. However, can we really compare the two payment systems? Or does this mean people are abandoning Visa in favor of Bitcoin?
In short
- Bitcoin transaction volume has surpassed that of Visa. Can it outperform ACH and Fedwire?
- Can we conclude that digital gold is now more used than Visa?
Annual Bitcoin Transaction Volume Surpasses Visa’s
The fact that the number of Bitcoin transactions surpassing that of Visa is an important milestone for decentralized networks, as Will Clemente says in a tweet. Indeed, Visa is a centralized payment network, unlike Bitcoin which is decentralized. Digital gold, as some still call it, is not present throughout the world like Visa. Therefore, the fact that there were so many transactions is surprising. However, this can be explained by some innovations on the Bitcoin network.
First, not all transactions on Bitcoin are fund transfers, unlike those on Visa. Secondly, a large number of these transactions come from Ordinals. This protocol offers the possibility for Satoshis on the Blockchain to be assigned a unique identifier and to carry out transactions with additional data such as images. According to U.Today,The high frequency transactions that this protocol requires to function largely explains the high number of transactions.
Bitcoin vs Visa: Who Owns the Future?
For the moment, Visa still dominates the payments market, by far. Not only are the many transactions on BTC not payment transactions, but also Visa is much more adopted and widespread around the world. We can even say that Bitcoin will not outperform Visa for long. This is most certainly a temporary phenomenon.
This absolutely does not mean that Bitcoin will not be more used than Visa for payments in the future. Many technical problems still need to be resolved. But the number of merchants who accept BTC is growing every day.
After Visa, the annual transaction volume of Bitcoin could outperform for ACH and Fedwire. Even if this is only a momentary phenomenon, isn’t this a sign that cryptocurrencies have as much potential as fiat currencies?
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