Ever since it was introduced in 2009, bitcoin was supposed to be an alternative to fiat currency. But the biggest problem with using cryptocurrency for regular in-store purchases is not what you can buy with Bitcoin; it’s the limited number of transactions that the network can process.
Bitcoin made a big splash on Wall Street this week with the debut of a Bitcoin futures ETF on the NYSE. Since trading commenced on Tuesday, the fund’s price has climbed nearly 8%, closing at $43.28 on Wednesday.
While not the first Bitcoin ETF, several other notable options are trading outside the US, the ProShares Bitcoin Strategy ETF (BITO) is certainly making the most noise in North America. And given its popularity with investors, we will likely see more Bitcoin ETF strategies hit the exchange floor soon.
But what does this mean for Bitcoin investors? Now that Bitcoin has all but cemented itself as a mainstream asset, we could be seeing more cryptocurrency transactions coming soon.
While the thought of buying your morning coffee or paying for your next vacation with crypto may sound enticing – places like Subway and Expedia already accept the coin – there are a few challenges to widespread acceptance in bricks and mortar outlets.
Addressing Transaction Challenges
Bitcoin can process an absolute maximum of seven transactions per second, compared to Visa, which processes over 150 million transactions a day, or roughly 1,700 a second.
As the number of transactions occurring on the Bitcoin blockchain increases, like during peak hours, the network can become bloated and slow, resulting in delays – extending from a few minutes to a few hours – which may not be a big deal for online purchases, but you wouldn’t want to be the one holding up a grocery store lineup.
Another side effect of blockchain congestion comes in the form of soaring transaction fees. Even if you have the patience to wait, you might not be thrilled to pay double or triple to do it.
Bitcoin is working on a solution to address transaction costs and delays. Aptly titled the Lightning Network, the project uses micropayment channels to process Bitcoin transactions off-chain, updating the blockchain only after transactions are completed. The result has been significantly faster transactions and lower fees.
The Lightning Network has been criticized for its lack of user-friendliness. Users are required to create a Lightning account, fund their Lightning wallet, and open a payment channel before they can transact, and they must also keep the channel open until the transaction is completed.
However, improvements to the Lightning Network are coming. The Taproot Bitcoin update is slated for November and will drastically improve the network’s speed, efficiency, and privacy. New wallets are also being developed which aim to make it easier to buy things with Bitcoin.
Once user issues are addressed, the Lightning Network could fundamentally change the way people use Bitcoin for everyday transactions. Not just big purchases, but eventually even small ones, like a cup of coffee.
But until then, people can continue to buy things effortlessly with Bitcoin online, either directly at dozens of retailers, including Home Depot and Overstock, or in-directly by using Bitcoin to buy gift cards for consumer favourites like Amazon or Best Buy.
A Company That Allows Consumers Around the World to Convert Fiat-To-Digital Currency
Also helping to make it easier for consumers to buy things with Bitcoin is Mobilum Technologies Inc. This technology-driven company provides so-called plug-and-play fiat-to-crypto digital payment infrastructure to exchanges, wallets, and businesses.
Their technologies already include on-ramping solutions that enable users to purchase crypto with a credit card. Now, the company has added crypto-to-fiat off-ramping to its product line. As quickly as users could buy crypto with cash and credit through Mobilum payment processing, they can now convert digital assets back into fiat via gift cards, debit, and credit cards. To date, gift cards from over 2,000 major retailers are available on the off-ramping platform.
“This new product feature opens up a significant revenue stream for the Company, and we are excited to see the continued customer and market demand for these services,” said Mobilum OÜ CEO Wojciech Kaszycki. “Off-ramp services are an evolving and core part of our product strategy, our goal is to ensure our partners and customers have a secure, compliant and efficient payments ecosystem to entrust and move in and out of.”
In other news, Mobilum recently announced that wholly-owned subsidiary Xport Digital Limited signed a Memorandum of Understanding with online back office solutions provider PhyloPay for its fiat-to-crypto and crypto payment widget.
In a separate engagement, the two companies announced plans to establish a long-term partnership in the global back office and crypto processing space which will see a new joint entity formed.
About Mobilum Technologies Inc.
Mobilum Technologies Inc. (CSE: MBLM) (OTC: MBLMF) (FRA: C0B) is a technology-driven Payment Service Provider (PSP) with a mission to make traditional finance accessible through compliant digital payment infrastructure and digital asset management technologies. Their goal is to allow consumers around the world to convert fiat-to-digital currency with Mobilum’s fully compliant on-ramp gateway. Mobilum has offices in Canada, Hong Kong, Poland and Estonia.
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