The annual transaction volume on the Bitcoin network has surpassed Visa for the first time, according to Reflexivity Research. This monumental development offers a snapshot of Bitcoin’s rising popularity and also challenges conventional wisdom about the limitations of decentralized finance.
Bitcoin as a Payments Network
When people think about Bitcoin, one of the first thought probably is its volatile price. While the value of the digital asset is attractive to many investors and users, it is important to note that originally Bitcoin is designed as a peer-to-peer based digital currency. For this reason, Bitcoin is a decentralised payment system that competes with names such as VISA, Mastercard and government-backed financial systems.
The Significance of Surpassing Visa
Visa is one of the world’s largest electronic payment system, with a global reach what includes hundreds of countries. For Bitcoin to surpass Visa in transaction volume is a significant achievement that shows the cryptoasset’s growing acceptance and utility. It’s a sign people aren’t just buying Bitcoin to hold as an investment but are increasingly using it for transferring money.
This achievement doesn’t directly affect Bitcoin’s price however, the increased transaction volume does contribute to Bitcoin’s network effect.
A Decade of Steady Growth – Bitcoin Surpasses VISA in Transaction Volumes
Bitcoin’s annual transaction volume has been growing for more than ten years. Its decentralized nature, low fees (well, not always), and global accessibility have contributed to its growing user base. If Bitcoin manage to maintain its current growth it could soon compete with government-backed financial systems.
The number of transactions on the Bitcoin blockchain reached 700,000 on 15 September, overtaking the VISA network. But what caused this surge?
BRC-20 tokens are gaining more popularity, which is essentially an experimental standard on the Bitcoin blockchain. These tokens open up new possibilities for the Bitcoin network, for example in various DeFi protocols and blockchain applications. This significant increase in traffic on the BTC blockchain allowed the number of transactions to overtake the VISA network.
Implications for the Financial Ecosystem
Bitcoin surpassing Visa in transaction volume represents a change how people view money and financial transactions. As Bitcoin and other cryptocurrencies continue to grow, traditional financial institutions may wants to adapt to an environment where decentralized financial systems play a more significant role.
VISA is open to cryptocurrencies as many crypto companies and exchanges use physical VISA cards.
Moreover not so long ago the credit card giant reported in a blogpost in August that they were testing a new method of paying fees known as “gas fees” familiar what we know at Ethereum network.
This milestone of Bitcoin is undoubtedly worth celebrating, but we still need to acknowledge the challenges Bitcoin faces. Scalability, regulatory and energy consumption are some of the issues that could impact its growth.