The use of digital assets as a means of payment, although still concentrated on bitcoin, should migrate to smaller currencies such as Doge, XRP Ripple, Stellar or Tron, according to Max Krupyshev, the CEO of crypto payment processing company Cryptoprocessing.com.
According to him, there are three reasons that lead to this reasoning:
- Delay in processing time
- Fees that can quickly change
- Opportunity cost to spend bitcoins
According to the executive, the last item is decisive for the future of the bitcoin as a means of payment. The opportunity cost is how much you fail to win – or lose – when you choose one of several alternatives. When you pay with bitcoin, your opportunity cost is the profit you can get using it as an investment asset.
Opportunity cost is decisive for bitcoin as a means of payment
“We implement instant payments in bitcoin and ethereum, so our users don’t have to wait for blockchain confirmations. It’s as fast as paying by card. The real question is: why should someone spend bitcoins that appreciate between 30 and 40% in a year when you can spend other coins that probably won’t appreciate? The dominance of bitcoin in payments is due to people’s habit of using it. But as the price grows, payment flows should shift to smaller currencies such as doge, tron, stellar and ripple.”
“The real question is: why should someone spend bitcoins that can appreciate between 30 and 40% in a year when you can spend other coins that probably won’t appreciate?”
The executive also cites stablecoins – such as USDT and BRZ – as candidates to outperform bitcoin in the payments area. However, he believes that this domain should be restricted to certain industries. For example, some stablecoins have usage restrictions in the IGaming area, where most cryptocurrency payment transactions are now concentrated.
Therefore, in the executive’s view, in the coming months and years, a higher percentage of crypto users will prefer to invest in cryptocurrencies than make online payments. And those who choose to pay with crypto, will choose coins with lower opportunity costs. In this sense, although the coronavirus pandemic may increase interest in cryptocurrencies as a means of payment, this role should not be fulfilled by the bitcoin.