Cryptos have always held the ultimate payment revolution, but that has not happened. We are already about 13 years after the entry of Bitcoin, and the stores that support BTC payment, say in Montreal, are only a few. One of the reasons for this is that BTC uses a proof-of-work (POW) protocol, which consumes a lot of electricity, accelerating global warming.
This is one of the common examples of the challenges in the way of crypto payments. Cryptos are getting it pretty hard to gain acceptance. Cryptos are still pretty new, and high volatility is also playing into their rejection.
Widespread Use of Plastic Money Slowing Crypto Adoption
One notable thing is that cash is getting replaced rapidly, but the biggest gainers are MasterCard and Visa cards. Every time a person abandons cash, the beneficiary is likely to be these card networks, which are very expensive.
One of the best solutions is competition. If there are many alternatives, clients would be able to select the cheapest option. The next, and the best option, is using cryptos.
However, crypto use has been pretty low, with only the speculative economy getting involved. It only leaks a few moments as a normal method of payment. The little progress achieved in cryptos is a result of the push by activists. Check out the examples below:
- The Wikimedia Foundation recommended that Wikipedia stop supporting cryptos because of its poor environmental record.
- Discord, a messaging platform, discarded rumors that it was planning crypto adoption.
Visa has an advantage over cryptos, which indicates the latter’s dilemma. Most retail payments are not easy to bootstrap. This means that for a new system to be adopted, it needs to be pretty useful. Now, people have developed a strong connection to plastic money and supporting companies employ dirty tricks like no-surcharge policies and reward points to keep clients roped into them.
The high volatility associated with cryptos is making even risk takers avoid them. So, is there a way out?
Crypto Evolves to Offer a Strong Alternative
The crypto world has evolved and is providing a response to the challenge of stability: stablecoins. These are cryptos whose value is pegged to fiat money. So, where regular cryptos fall short, stablecoins are considered an excellent option for fighting plastic money oligopolies.
The primary challenge at this point is that many stablecoins are based on proof-of-work (POW) blockchains, which makes them open to criticism on sustainability. Again, there is a way out, and this has been demonstrated by Mozilla. In January, Mozilla temporarily stopped crypto donations because of conflict with its sustainability goals, but it later opened doors for those based on proof-of-stake (POS) protocols. Ethereum is also switching to the less energy-intensive POS.
Clearing the challenges on the way of cryptos is important because we need to make them win. However, the truth is that MasterCard and Visa dominance will not ebb any time soon.
