While the surge in cryptocurrencies over the past year has been the source of excitement among advocates and consternation from the detractors, a look at the prices only hides the real value unlocked within the ecosystem.
The real value of cryptocurrency lies in its use, not speculation
With the pandemic weighing on the global economic outlook and confidence in legacy frameworks nearing rock bottom, crypto is filling the void among investors, consumers and traders. While the significant rise in crypto valuations can easily be seen as the harbinger of time to come, the real value of cryptocurrency lies in its use, not speculation.
Cryptocurrency adoption is increasing rapidly in various industries and use cases. While the most controversial movements just as well take place in the financial phase funds and financial institutions are accumulating in the emerging asset class, the main hurdle of cryptocurrency has always been the spending space. However, the increased financial allocations have eclipsed the true nature of the momentum in the blockchain ecosystem, which is greater retail adoption.
Since adding support for Bitcoin, Bitcoin Cash, Ethereum and Litecoin in October, Paypal now has that 26 million merchants who can accept cryptocurrencies from Paypal’s universe of 300 million users. That 26 million reflects a huge shift, especially now that there is a mechanism that helps traders avoid the volatility inherent in cryptocurrency. To underline this point, Paypthough far from the only player participating in this burgeoning arena.
Binance Pay, the latest addition to the largest cryptocurrency exchange’s suite of services, is designed to make the most of Binance’s massive crypto footprint in the retail space. Within a little less than a week since its initial disclosure, Binance Pay has its first major trading partner for its digital payment service after blockchain-based travel booking service Travala announced an integration with the leading cryptocurrency exchange.
Travala, which offers 3,000,000 booking options across hotels, flights, activities, tours and more, will use Binance Pay as the preferred payment option for its services. Accordingly, Binance Pay accounts allow users to seamlessly fund their next travel experiences with support for multiple cryptocurrencies and one fiat currency.
Others in the travel industry are also joining the momentum of adoption, underscored by Booking.com’s recent decision to integrate Crypto.com’s Visa Card program. The January announcement opens Booking’s services for more than 5 Million Crypto.com Cardholders. App users can access special offers and discounts as the tourism industry gears up for an expected travel boom amid pent-up demand for getaways.
Still, the ability to spend is just one reason why sentiment around crypto is changing. The other powerful catalyst is growing mistrust. Whether it’s mistrust of governments, financial systems or other legacy institutions, this growing stance bodes well for blockchain. Given its boundless approach and decentralized benefits, many people see cryptocurrency as the gateway to a more level, fairer and more transparent playing field that doesn’t skew rewards in favor of centralized institutions.
In response to a Bitcoin.com question, crypto lawyer and evangelist Lea Thompson, who sent the Girl Gone Crypto Twitter handle, underscores this point.
As more and more people want to opt out of current financial systems, expanding the possibilities for using and spending their crypto on everyday things like travel is an important step. However, one detail that I believe many consumers overlook is what kind of taxable events they can trigger. I think more transparency is needed from companies accepting crypto about what kind of tax events will be triggered by the transaction.
With the growth of fungibility and merchant support in the blockchain ecosystem and more traditional brick-and-mortar stores, the use cases for holding, spending and receiving cryptocurrencies continue to expand. While taxes remain a thorny issue, the proliferation of custodial solutions and the participation of key market players in the old financial system means that resolving these issues will be a function of time, not if, but rather when.
Between the pandemic, the increasing digitalization of services, and the widespread mistrust of the status quo systems that largely support everyday life, the perfect storm for crypto adoption has finally manifested. Given the uncertain background, the arguments for cryptocurrency have never been more compelling. The pace of adoption, especially in retail, still reflects that idea.
As a consumer, how comfortable do you feel transitioning to cryptocurrencies as your primary retail purchase currency? Let us know in the comments below.
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