During this year Bitcoin (BTC) has slowly been creeping closer to the transaction volume that Mastercard has been posting on an average day. In the last month Bitcoin has reached the Mastercard transaction volume average nine times.
It’s impossible to know how far Bitcoin adoption will go. If Bitcoins were accepted as widely as Visa or Mastercard, it could lead to increased use of the network.
At the moment Bitcoin does not process close to as many transactions per day as Mastercard, yet they have reached the same volume multiple times. This means that Bitcoin transactions are larger but fewer whereas Mastercard processes many smaller transactions. If Bitcoin were to process as many transactions as Mastercard their volume would likely be considerably higher.
The Problem of Scaling
One of the issues with Bitcoin at the moment in is that the network only processes about 5 transactions per second (tps) and currently has a physical limit of 7 tps, due to the size-cap of the blocks transactions are stored on. Mastercard can process a whopping 5000 tps.
There are various technical reasons as well as policy reasons why Bitcoin can only process so few transactions compared to companies like Mastercard and Visa. It doesn’t look like Bitcoin isn’t trying to become a new Mastercard or Visa. However, Bitcoin SV (BSV) could make it, as BSV’s test network hit a new record of processing over 9000 transactions per second earlier in the year.
Lightning network is also a solution that aims to solve the problem of scalability for Bitcoin, through creating a second layer that only handles small transactions and thereby reducing the load on the blockchain. This is called the off-chain approach.
Cryptos Are Becoming More Popular for Everyday Use
According to Mastercard, 71% of people expect to use cashless services moving forward. This means that electronic methods of payment are becoming increasingly popular, and as Bitcoin and other cryptocurrencies are becoming more mainstream people might prefer to use them.
Consumers are also increasingly showing interest in being able to spend crypto assets for everyday purchases. As global interest in cryptocurrencies as a payment method continues to accelerate, 4 in 10 people (40%) across North America, Latin America and the Caribbean, the Middle East and Africa, and Asia Pacific say they plan to use cryptocurrency in the next year.
Mastercard Investor Relations [source]
Mastercard has dabbled with blockchain and digital assets a few times:
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