People still ‘underrate’ the superiority of crypto payments- Vitalik Buterin
The Ethereum co-founder believes that cryptocurrency payments provide a "significant boost" to worldwide trade, charity, and even domestic payments.
According to Ethereum co-founder Vitalik Buterin, the superiority of cryptocurrency for payments is sometimes "underrated" when compared to fiat, citing the ease of international payments and charitable donations as major examples.
Buterin made the remarks in a Twitter thread on Wednesday, adding that it's not simply censorship resistance that makes cryptocurrencies "superior" when it comes to international business, charity, and even intra-country payments. Globally, cryptocurrency adoption in payments is increasing. According to a July research from analytics platform PYMNTS titled "Paying With Cryptocurrency," 85% of firms with yearly incomes surpassing $1 billion are using crypto payments to locate and gain new consumers.
Crypto debit cards are also becoming more widely available, with Binance recently working with Mastercard to launch a prepaid card for Argentinians. Many of these cards, such as Wirex's, also reward users with crypto cashback for using the card and allow users to spend a variety of cryptocurrencies and fiat currencies, as well as withdraw cash from ATMs.
As Vitalik pointed out, cryptocurrencies are also particularly beneficial for international money transfers and charitable donations. International payments have traditionally taken a long time to process and resulted in high fees when done in fiat currency. The war in Ukraine is a prime illustration of its utility in this area, with Vice Prime Minister Mykhailo Fedorov tweeting on Aug. 18 that the nonprofit and activist group Aid For Ukraine alone had raised R909 million.
However, not everyone is as enthusiastic about the use of cryptocurrency as a means of payment, with common concerns including price volatility, ease of use, and regulatory risk, as well as high transaction fees and lengthy processing times for certain cryptocurrencies such as Bitcoin (BTC) and Ether (ETH).
Whereas it varies, the Bitcoin blockchain now handles around five transactions per second (TPS) with an average cost of R13,78 as of Wednesday, while Ether currently handles around 29.3 TPS with an average fee of R26,41. Visa, on the other hand, claims 24,000 transactions every second and costs between 1.4 and 2.5% for each transaction.
The development of the lightning network, a layer-2 solution built on top of Bitcoin's blockchain, maybe a solution for Bitcoin's lagging TPS, whilst the Ethereum Network has been looking at layer-2 roll-up technology, such as zk-Rollups, to drastically reduce costs and processing times.
Stablecoins, cryptocurrencies designed to be tied to another asset (such as the US dollar), have also grown in popularity, particularly in emerging economies.
