According to a Blockdata report, bitcoin will have processed 62 percent more transactions in terms of dollar value than PayPal by 2021. However, Mastercard and Visa continue to be the undisputed leaders in this metric.
Bitcoin is showing signs of increased adoption and growth, with the cryptocurrency processing 62% more transactions in terms of dollar value than PayPal in 2021. The new information comes as critics continue to debate bitcoin’s viability for global payments.
Blockdata revealed the information in a report published on November 23 that compared bitcoin to payment methods such as Mastercard and Visa.
The report’s primary focus was on whether bitcoin could compete with the two payment networks, which it concluded in the affirmative but with the caveat that it would take time. In 2021, the Bitcoin network will process approximately $489 billion per quarter. PayPal processed $302 billion per quarter, while Mastercard and Visa processed $1.8 trillion and $3.2 trillion per quarter, respectively.
So, while it’s clear that bitcoin has a long way to go before it can compete with Mastercard and Visa, the competition may arrive sooner than you think. After all, bitcoin reached its current level of adoption after only 12 years of existence, beginning with a small group of cypherpunks and enthusiasts.
Blockdata is more concerned with comparing bitcoin to Mastercard and Visa, which it sees as technologies with distinct applications. It classifies the latter as “spending technologies,” whereas the Bitcoin network is classified as a “saving technology.”
To that end, it mentions a few factors that could help Bitcoin reach the processing levels of the two established payment networks. This includes the number of transactions, the average amount of BTC per transaction, and the price of bitcoin itself. But, of course, the most important question is whether the bitcoin network can handle such large volumes of transactions that it becomes competitive.
Bitcoin’s Lightning Network is expected to grow rapidly.
The ability of Bitcoin to handle more transactions will be determined by the implementation and improvement of scaling solutions. The Lightning Network, which reached an all-time high capacity in late September 2021, is currently the most important solution in play. During the same time period, a record number of nodes and payment channels were also recorded.
According to Arcane Research’s State of Lightning report, the Lightning Network will have 800 million users by 2030. It cited remittances, gaming, and streaming as major use cases that would increase the scaling solution’s adoption.
With Lightning’s performance, the Bitcoin network could very well be on its way to competing with Mastercard and Visa. It will, however, take some time before it comes to fruition.