Bitcoin's transaction volume outpaced Paypal's by 62% in the first three quarters of 2021, still way behind Mastercard and Visa
Bitcoin was initially supposed to become a digital replacement for FIAT currencies, but as its US$ valuation increased over time, BTC is now regarded as the ultimate store of value and the best candidate to replace gold. BTC’s transaction speed is not really poised to replace credit card processing speeds right now, even though the Lightning Network does provide a considerable boost. Adoption and scaling could prove a problem for BTC down the road, yet even with the current limitations, BTC still managed to outpace Paypal as far as transaction volume goes, showing signs of increased adoption and growth. According to a Blockdata report cited by Binance, the BTC Lightning Network managed to process 62% more transactions in terms of dollar value compared to Paypal this year, yet this is just a fraction of what Visa and Mastercard have processed.
Blockdata concluded that the BTC network could eventually evolve into a competitor for the big credit card processors, despite the current efforts to promote BTC as the best store of value rather than an infinitely divisible digital equivalent for US$. With its prices soaring to almost US$70,000 per coin this year, BTC processed US$489 billion per quarter, while Paypal processed US$302 billion per quarter. The graphs show that BTC’s volume was higher in the first two quarters of 2021, whereas the Q3 volume is more or less the same as Paypal’s. Q4 projected volume for BTC appears to be the highest ever as the market anticipates a price push to more than $100,000 per coin. However, this Q4 volume would still be 260% lower than Mastercard’s Q3 volume (US$1.8 trillion) and 540% lower than Visa’s Q3 volume (US$3.2 trillion).
Depending on volatility, BTC’s quarterly volume could match Mastercard’s figures sooner than one might think. If BTC is to match the large credit card processors, the Lightning Network needs to be upgraded to the point it can handle thousands of transactions per second. Right now Visa handles around 1,700 transactions per second, while BTC only 5 per second. The Lightning Network currently supports almost 10 million users, and, according to a report released by Arcane Research, this figure is estimated to grow to 800 million by 2030 through remittances, gaming and streaming.