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With advances in scaling and interoperability, cryptocurrencies are more ready than ever for widespread adoption.
With crypto gas prices dropping to lows after numerous recent innovations in scaling and interoperability across different chains, we can more vividly imagine a possible shift toward widespread crypto payments.
Crypto payments at scale are currently prevented by regulation, lack of understanding and mass adoption, as well as digital assets being used primarily for investment purposes. For starters, Satoshi Nakamoto’s original concept was steeped in the idea of peer-to-peer digital cash — that’s exactly what appears in the title of his 2008 Bitcoin white paper.
Despite the initial excitement and deep conviction surrounding this pioneering system since its inception, the core idea quietly slipped through the cracks as our focus shifted to cryptocurrency as an investment. The often-expressed nostalgia for the famous white paper became overshadowed by this unintentional deviation.
The remarkable ascent of exchanges, NFT marketplaces and the wide range of financial opportunities enabled by decentralized finance (DeFi) vividly illustrate this phenomenon. Investments are rarely used as mediums of exchange, so the price has been more important than utility in crypto. However, new decentralized systems kept being released, some of which were designed solely for utility, and this has helped change the outlook of cryptocurrency use cases in recent years.
Some Web3 companies have taken crypto payments for granted and created products like cryptocurrency-based credit cards that can be accepted in many locations, offering novel features as well as more traditional ones like cashback. The importance of crypto payments is the idea of decentralization — other benefits come later.
The introduction of stablecoins backed by fiat currency has shown the potential for traditional finance (TradFi) and DeFi to collaborate more effectively. However, it is important to acknowledge that certain widely-known stablecoin projects such as Terra have come under scrutiny for questionable operational practices, raising concerns about the effectiveness of this collaboration.
Despite high transaction fees, limited public understanding and regulatory uncertainty, some projects have found ways to integrate crypto into the marketplace for goods and services. The experiments started in the early 2010s with more straightforward, smaller websites such as online book or gift shops, and even web service providers accepting crypto.
Later, established crypto brands began to work more intensively on payments. Coinbase launched Coinbase Commerce in 2018, a web service that allows businesses and individuals to accept a variety of cryptocurrencies on their websites. Other crypto brands followed suit with their similar products. Today, Bitcoin is accepted as payment by major companies, including Microsoft, Intuit, AT&T, Burger King, KFC, McDonald’s, Twitch, Tesla, AMC, Norwegian Airlines and many others.
Source: Unsplash
Widespread crypto adoption is closer than one may think when fast food, cars, travel, software and similar necessities can be purchased with digital currency. What has made all of this possible is the rapid advancement of blockchain technology that can interact with the real world, such as payment gateways that bring crypto to e-commerce, interoperable chains and the aforementioned stablecoins for easier pricing of goods.
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