Data from Chainalysis suggests that around $4 billion in crypto transactions were recorded by merchants and payment processors over the course of 2019.
Bitpay and Coinbase
Bitpay, the Atlanta-based crypto payment processor, reportedly accounts for about $1 billion of that.
Coinbase Commerce had just over $130 million in processed payments in 2019, which is reportedly a huge increase over 2018.
Coinbase used to do merchant payments as one of its core offerings, as well as tipping. It wound down both services eventually to focus on its exchange products. Coinbase Commerce has cropped back up to replace some of the lost functionality, but it doesn’t compare yet to Bitpay in terms of adoption.
Speaking of adoption, that’s really the name of the game in the merchant payments sector. While several major retailers support cryptocurrency in some form or another, $4 billion is actually a surprisingly high amount in terms of the amount people spend in cryptocurrency.
At this stage in the game, obtaining cryptocurrency still isn’t “easy.” It’s not something you can ask for as change at the register, it’s not something you can just transfer around in your bank account. To acquire it takes work. Therefore, most people aren’t interested in spending it on trivial items, unless, of course, the value has increased so much that it’s a net gain to spend it that way.
Which is the major advantage of holding and then spending cryptocurrency. It’s likely to be worth more later, so if you hold it, you gain. This can translate to more buying power at the store, or a higher price on the exchange. In either case, that’s the speculative interest that people are willing to sacrifice time and effort acquiring cryptocurrency for – the prospect of greater returns.
Coinbase reportedly wants to get its game in gear. An engineer reportedly told Coindesk:
In 2020, we’re hyper-focused on providing a complete merchant experience with business features and insights, better serving other geographies with internationalization, adding more currencies, and building seamless integrations that leverage other Coinbase products.
How To Move Forward?
Again, though: a million websites could be accepting cryptocurrency, including Amazon, and it wouldn’t make a difference so long as people aren’t using it.
One way forward, in that regard, is the Bitcoin ATM. BTMs make it easy for people to acquire cryptocurrency, with small amounts of cash, at a kiosk. Unfortunately, there just aren’t enough of these – yet.
Some argue that a variety of merchants accepting Bitcoin and other cryptocurrencies isn’t what missing. Some don’t see Bitcoin as a currency, but rather as an asset. Therefore, as long as it can get to exchanges and therefore be liquid, it should be fine.
Such is the fundamental point of contention between Bitcoin Core and Bitcoin Cash. The former prefers to see Bitcoin as a form of backing asset, while the latter views the cryptocurrency as a means of payment.
While Bitcoin Cash has a growing community, it was Bitcoin that lead the way in crypto sales for Bitpay.
Like as not, it was Bitcoin that lead the way around the globe. For now, at least, that’s going to be the name of the game–Bitcoin wins.