Despite its rise in power, bitcoin remains a volatile asset, making it difficult to use as a means of payment.
Four years ago, fast-food chain KFC tweeted from its Canadian account that it would allow bitcoin as payment for its chicken buckets. The company told AFP that the ad campaign was a joke that only lasted an hour and that it hasn’t received any payment in cryptocurrency since, but online stories continue to pop up. assert that KFC “accepts” bitcoins.
Other companies, such as Tesla and Dell, offered to sell their products in bitcoins before quietly abandoning these initiatives.
Bitcoin will probably never be used for day-to-day purchases, as it is a particularly volatile asset and each transaction is expensive, energy-intensive and takes at least half an hour to process.
“No one is ever going to walk into a KFC to buy a chicken burger and wait 30 minutes to pay for it,” said Andre Cronje, a South African cryptocurrency expert and developer, in an interview with AFP.
There are, however, thousands of other cryptocurrencies that are more stable than bitcoin and with shorter execution times for payments. According to the specialized site CoinMarketCap, the total value of cryptocurrency assets is more than 2,000 billion dollars, half of which is bitcoins.
Developers like Mr. Cronje are building infrastructure to facilitate virtual currency payments. But mainstream adoption is crucial. For their part, companies are still struggling to find the ideal formula.
Caution on Microsoft’s side
Microsoft is one of the big companies that is moving cautiously into the cryptocurrency field. The US tech giant insists that its shareholders will never be exposed to digital currency price fluctuations. PayPal and Apple have made similar promises.
Microsoft has partnered with Bakkt, a service that converts its cryptocurrency assets into various products like Xbox gift cards or adding credit to a Starbucks payment card.
Backed by Microsoft’s M12 investment fund, Bakkt floated on the New York Stock Exchange last year and forged a series of partnerships with companies including Mastercard, which drove its stock soaring. But after announcing major losses, Bakkt saw its stock plummet, raising questions about the viability of its model. The company, which was targeting 9 million customers at the end of 2021, reported only 1.7 million active accounts at the end of last year.
For its part, PayPal has been offering since last year in the United States and the United Kingdom a system for paying in cryptocurrencies via which users’ cryptoassets are directly converted into dollars or pounds during their purchases.
The popularity of this service and other similar initiatives remains difficult to establish. None of the companies contacted responded to AFP’s requests. Market watchers say it’s still too early to tell if these forays into the cryptocurrency space will pay off. “My position is to not give in to enthusiasm and watch the horse race,” said John Freeman, analyst for CFRA research.
“No one likes to spend their bitcoins”
The limits to the mass adoption of cryptocurrency payments for everyday consumer products are considerable, if not insurmountable. Cronje, who uses services like BitPay and BitRefill to spend his cryptocurrency wallet on Amazon, Uber and elsewhere, acknowledges that people less expert than him would “go broke very quickly” if they relied on cryptocurrency technology on a daily basis. blockchain, which governs cryptocurrency exchanges.
The developer envisions a future where credit cards will continue to be used but many banking transactions, which currently require intermediaries, will be automated on the blockchain.
“It’s a technology that’s going to save them 20% to 25% of their overhead and costs,” says Cronje. “The question is not if it will happen, but when.”
Outside of the financial sector, companies could continue to facilitate the use of cryptocurrencies even if the advantages are not obvious. The Pavilions hotel chain, which has been collaborating with a cryptocurrency payment service since last year, says for example that it has not observed any major difference among its customers.
“It appears that no one likes to spend their bitcoins, even on vacation!”, said a spokesperson for Pavilions in an email sent to AFP. “It proves that people see bitcoin more as an investment tool than a means of payment.”
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Why Companies Struggle to Offer Bitcoin as a Payment Method
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