Bitcoin vs. Alternative Cryptocurrencies: Which is the most usable for merchants?
Volatile or not, there is a growing public demand that retailers and businesses accept payments in cryptocurrencies. According to a survey published in June by the UK-based cryptocurrency, CreditCoin, 75 percent of US consumers want the option of using cryptocurrencies to pay for items they buy in stores. Unfortunately, the proportion of stores that offer this option does not seem to have reached three quarters.
However, the number of merchants accepting Bitcoin (BTC) and other currencies is constantly increasing, with the number of stores that accept Bitcoin reported to Coinmap worldwide had increased by 3,716 in a single year. There is, therefore, a continuing interest among companies to accept cryptocurrencies as a means of payment, even if the remarkable ups and downs of the crypto market have strengthened the popular impression that such use may not be 100% optimal at this time.
However, there remains a question for those traders still hesitant about jumping into the world of crypto-payments: what currency is the most useful and practical as a means of payment? Well, Bitcoin has an advantage in terms of the fact that many more people have the original cryptocurrency than any other. However, numerous alternative cryptocurrencies (altcoins) particularly Bitcoin Cash, Dash and Litecoin are already faster and cheaper than Bitcoin as a payment method, and while they may have less value than their older rival, they currently provide a more fluid retail experience.
That said, companies are increasingly less likely to face a choice of one or the other when deciding whether to accept crypts as payments. This is because several companies offer cryptopayment portals that allow merchants to accept a variety of different currencies, while most major currencies take regular actions to improve the speed of their transactions and profitability. As a result, retailers of the future will realize that they can take better advantage of the fact that people have (and want to pay for) different currencies for different purposes, which makes the situation beneficial for more than one currency.
Bitcoin: Popularity and value (relatively) stable
One of the simplest and most important requirements that a cryptocurrency must meet before a company begins to accept it is that it is owned by a large number of people. If this condition is not met, then a trader would be limiting his market by accepting it instead of a more popular rival. This is the reason why forgetting for a moment how cryptocurrencies and their Blockchain really work. Bitcoin is still the most viable currency for retailers to accept.
Currently, there are about 27.6 million addresses of Bitcoin wallets, while there are actually 40.7 million addresses of Ethereum. However, before concluding that there are more Ethereum holders than Bitcoin holders, it should be noted that a significant proportion of these addresses are smart contracts instead of purses and there is also the fact that the Ethereum Blockchain houses 599 tokens ERC-20 , which are included in your address count. And although there are no specific data that break down this figure into addresses of contracts and purses, respectively, there is data on the number of addresses that have been active in the last 24 hours, and shows that Bitcoin has more active purses than any other currency:
Leaving aside the estimates and calculations, there is other evidence that suggests that Bitcoin is the decisive winner in terms of the popularity of the crypts. In March, the Finder.com consumer website published a survey that found that 5.15 percent of Americans owned Bitcoin, compared to 1.8 percent for Ethereum and 0.9 percent for Bitcoin Cash. . Similarly, a player survey conducted by the Swiss-based gaming company also found that Bitcoin was the most popular cryptocurrency, with 83 percent buying Bitcoin compared to 75 percent bought by Ethereum. And finally, 60 percent of Americans have heard of Bitcoin, and only 46 percent and 41 percent have heard of Ethereum and Litecoin, respectively.
All this suggests that, for any merchant who wants to make sure that they open their doors to the largest possible number of potential customers, Bitcoin would be the way to go, that is, if they could accept the payment in a single cryptocurrency. And according to those who follow the merchant’s acceptance of the cryptocurrency, it seems to be the way that most customers and merchants continue, despite the recent growth in the use of altcoins.
“BTC is by far the dominant cryptocurrency for transactions, probably due to BTC’s maturity, its ‘brand recognition’ and Bitcoin’s momentum.”
Calabrez explained that much of the attraction of Bitcoin is its ability to attract new markets: “Traders are always looking for ways to generate more sales, some traders are interested in mounting the ‘cryptocurrency wave’ from the marketing point of view, and they accept cryptocurrencies to get more business, for them, it’s a marketing experiment with minimal overload to add acceptance along with a mitigated risk of chargeback. ”
In addition to “brand recognition” and momentum, Bitcoin has emerged through the recent turbulence of crypto markets as one of the most resistant currencies, and this is what also increases its usability from the merchants’ perspective. It can still be volatile compared to, for example, the US dollar. UU., But it has remained much more of its value during the recent bear market than its rivals. For example, during the month before August 14, it decreased by 2.7 percent, from $ 6230.32 to $ 6061.74. However, by contrast, Ethereum, Ripple, Bitcoin Cash and EOS fell by 38.5 percent, 39.5 percent, 29 percent and 36.5 percent, respectively. This is a big difference, and although many traditional economists would argue against accepting any type of cryptocurrency as a means of payment, it is clear that Bitcoin is the best in terms of preserving its value.
It is true that the fact that Bitcoin has retained its value and can continue to appreciate constantly in the future is also a blow against its usability, although not so much from the perspective of the merchants. Because Bitcoin could rise perhaps even bullish, BTC owners can not use it to buy a pizza, for example, since most now know that the current BTC equivalent of a pizza could be worth much more in a year.
However, even with the reluctance of some cardholders to divest themselves of their Bitcoin, BTC is still spending more liberally than any other cryptocurrency. Last December, BitPay reported that it had processed BTC payments valued at more than $ 1 billion, while it is currently processing a Bitcoin transaction every 10 seconds. Meanwhile, it processed $ 591 million in transactions alone in the first half of 2018, up 40 percent from the same period last year according to BitPay’s public relations representative, Jan Jahosky. And to put this in perspective, Jahosky told Cointelegraph that, although the company began processing payments in Bitcoin Cash earlier this year, Bitcoin remains dominant:
“Bitcoin Cash, which BitPay started accepting earlier this year, is less than 10 percent of BitPay’s volume, with Bitcoin still the most popular and over 90 percent.”
Altcoins have lower transaction rates and confirmation times. In addition to the disadvantage of discouraging part of their owners from actually spending it, Bitcoin also does not compare favorably with certain altcoins in terms of how it can actually be used in practice to buy goods and services. Devan Calabrez recognizes:
“Bitcoin is definitely useful as a means of payment, especially for higher-priced items and across borders.” On the other hand, few people are using Bitcoin to buy cheap items like paper plates, for good reason. volatility, transaction times and fees paid by buyers that create barriers to conversion weaknesses tend to slow Bitcoin sales for low-cost items. ”
BTC generally has the highest transaction rates of the major cryptocurrencies. BitInfoCharts puts its current average transaction rate at $ 0.72. This might seem relatively low compared to the peak of $ 55 in the rates he witnessed in December, but as the list below illustrates, he is still way below his main rivals.
When the semi-annual and annual charts are observed, it becomes evident that, in times of great congestion, Bitcoin also tends to rise more dramatically than its closest competitors. On June 20, its average daily rate soared to $ 6,852, an increase of 132.6 percent compared to the previous day. On the other hand, the six-month spikes of Bitcoin Cash and Dash were only $ 0.217 and $ 1.25 respectively, with these highs falling on February 20, when the average Bitcoin rate was $ 3,042 (increased to $ 6,209 four days later) . Meanwhile, Litecoin’s maximum of six months was $ 0.416 (February 26), although Ethereum’s was $ 5,528 (on July 2, when it was probably the subject of a spam attack).
Bitcoin may be popular, but …
Bitcoin can be popular, and it can be a good store of value, but clearly it’s not the cheapest way to buy goods. Although its transaction fees have gradually decreased since the SegWit update was implemented in February, the occasional increase in congestion can increase rates by a few dollars, something that can make a considerable difference when what is being purchased is Less expensive than the rate. In fact, Devan Calabrez told Cointelegraph that BTC’s “non-trivial transaction fees” have created some friction with companies, and some receive complaints because their clients have to pay the same amount of money for transaction fees as for the items they want to buy
The issue of BTC fees is compounded by its longer confirmation times, with the average confirmation time reaching a peak of 11 453 minutes ie seven days, 22 hours and 53 minutes on January 23. As with rates, it is now doing much better thanks to its SegWit update, since its average confirmation time for the week between August 1 and August 8 was only 14.7 minutes. However, he still has a lot of work to do, especially since the average must be only 10 minutes. For example, the average block time for Ethereum was only 14.5 seconds during this same week (according to Etherscan), while the current averages for Dash, Litecoin and Dogecoin are 2.37, 2.43 and 1.02 minutes. respectively.
However, it is not only the slow confirmation times that restrict the usability of Bitcoin, but also its block size of 1MB and the average number of transactions it can process per second. This number remains technologically limited, with the current top ceiling of seven transactions per second although the SegWit upgrade technically was multiplied by four. On the other hand, Ethereum can handle a theoretical maximum of 30 transactions per second, while the Bitcoin Cash block size limit of 32 MB could mean that it can handle 32 times more transactions than Bitcoin, that is, around 224 per second. Although it is not as fast as this, Litecoin is four times faster than Bitcoin (forgetting SegWit), since its block confirmation time is a quarter of Bitcoin. Similarly, the theoretical limit of Dash at launch was four times that of Bitcoin (ie, 28 per second), although in December it changed its block size from 1 MB to 2 MB, doubling the number of transactions that I could handle per second.
In short, Bitcoin can not handle high transaction performance in its current state, as well as its main rivals. In particular, it currently does not get close to the speeds offered by Bitcoin Cash, which at the top beat its closest rival Dash at approximately 168 transactions per second. In addition to this, Bitcoin Cash also has the lowest transaction rates, which means that it is the most useful cryptocurrency from a point of view that focuses mainly on cost and speed. It is largely for this reason that the currency has won many converts in the crypto community since the Bitcoin fork on August 1, 2017.
“Bitcoin Cash is what I started working on in 2010,” said Gavin Andresen, a leading developer of Bitcoin, in a November tweet, “a store of value and medium of exchange.”
Devan Calabrez agrees that Bitcoin Cash has reasons to be recommended as an alternative to Bitcoin and other currencies, particularly with regard to buying cheaper products. “BCH seems to evolve as a compliment to Bitcoin,” he explains. “Traders appreciate faster transaction times and lower rates, which also attract buyers.” This is particularly true for merchants who sell items with lower entries, where even small fees can increase the results by a significant fraction.
And although Bitcoin Cash may seem like the best practical option for some, one of its closest rivals in terms of profitability Dash reported Cointelegraph which is gaining considerable acceptance among retailers. “The Dash network is specifically designed for the use of payments,” said Dash Core CEO Ryan Taylor. “It offers instant payments, which makes it viable at the point of sale, and the rates are very low, with a median transaction fee of around one tenth of a cent.” This combination makes Dash feasible for day-to-day purchases. the consumers.
We also focus a lot on making the network useful by financing commercial integrations, and Dash is currently among the most accepted digital currencies. Commercial adoption is growing rapidly. The number of listings on discoverdash.com a website for merchants to register has grown by 250 percent in the last six months, and Dash is now accepted by more than 2200 merchants worldwide. ”
Decentralization and election
Bitcoin has had a better performance in preserving its value recently than most altcoins. In addition, Bitcoin may not be as fast or scalable as some of its rivals, but it is more decentralized than many of them at various levels, and with greater decentralization comes greater security of its network. For example, there are reports that Bitcoin Cash is significantly more centralized than Bitcoin. On the one hand, the size of the 32MB block may tend towards greater centralization of the mining nodes in the future, since the capacity to process blocks of 32MB requires the type of computing power that only the largest mining companies are likely to own. And secondly, there are reports that Bitcoin Cash is already fairly centralized even when most nodes still do not use the full 32MB bandwidth with Jameson Lopp revealing data in December that indicated that up to 54% of Bitcoin Cash nodes are running on Hangzhou Alibaba virtual servers in China, compared to 2% of Bitcoin nodes.
Such a (relative) centralization could be said that a blockchain has a higher risk of faults, since theoretically it could be deactivated by a government agency that closes a small group of servers or nodes. Clearly, this is not what any company or retailer would want from a cryptocurrency that they just accepted as payment – although, even if Bitcoin is more decentralized than Bitcoin Cash in terms of servers, Bitmain’s domain gives it problems of its own. when it comes to mining. And in terms of block participation, it is not as decentralized as Bitcoin Cash or Dash, as the four main Bitcoin Cash and Dash miners produce 55.1 percent and 41 percent blocks, compared with 57.5 percent for Bitcoin – it’s currently 69.75 percent for Ethereum, 68 percent for Litecoin.
However, before descending into an endless – and often subjective – debate about which cryptocurrency is the most decentralized, it is worth noting that merchants and companies do not have to choose just one currency when they decide to accept the crypts as payment. Increasingly, platforms are available that allow merchants to accept any of the multiple cryptocurrencies, thus providing their clients with a choice of different currencies to pay, which allows them to rely on the strengths of each currency at different times.
The situation will be beneficial for both merchants and customers, and since the crypto-payment platforms will increasingly offer a wide range of currencies, it will be a situation that will mutually benefit all cryptocurrencies, not just the ‘most usable’ one.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.