Do you believe that bitcoin is the best store of value? Well, the statement is entirely accurate. However, if you think that you can use it at all the stores available across the globe to purchase and sell goods, it is not quite ready for that thing. Everyone across the globe, including some government, believes that bitcoin is entirely ready to be used to make payments for goods and services at stores.
Still, Deutsche Bank research analyst Marion Laboure does not believe the same. To prove his view, he published a report which shows that from all the people who are holding and using cryptocurrencies like bitcoin for making transactions, only a few of them are using it to make payment for goods and services all across the globe.
The bank we have mentioned above is surveying different cryptocurrencies. A survey conducted by this bank took only consideration 60% of the total number of bitcoin holders. From the total number of 60% of bitcoin holders who used BTCUSD, only a tiny percentage of -0.97% have been using it for making different kinds of payment.
On the contrary, we can say that just 3% and 7% of the total consumers use cryptocurrencies like bitcoin to make a means of payment. The survey was conducted on the data collected in the period of the past three months. The percentile representing the number of bitcoin transactions for the purchase and sale of goods in the given period was less than 2%.
According to the survey conducted by the research analyst of Deutsche bank, there are three most important reasons behind the low rate of payment made with bitcoin. The first one is low transaction speed, the second one is a high degree of volatility, and the third is the high degree of cost associated with the transactions.
These prominently discussed drawbacks of cryptocurrency usage in the financial system for making payments, but several others are. One of the important reasons that you may not be willing to make transactions with bitcoin on any store is the security. Even if you are going to get a certain degree of security with digital wallets, it is not a hundred percent safe on The Official Platform. A shallow degree of security of cryptocurrency wallets is significantly less likely than a credit card.
Furthermore, once the digital key for accessing your account is lost, it is entirely impossible to get into it. Therefore, there is a high degree of risk of losing your bitcoins forever. The analyst also questioned on Monday that if your bitcoin wallet account is hacked, you cannot call or register a complaint with any of the authorities from the government as it will be decentralized. In addition to that, the analyst also explained that the bitcoin’s digital ledger could store only 1 MB of information. It means that mining a new block for storing new information; it may take up to 10 minutes. Therefore, it is only that long that Blockchain will take to confirm the bitcoin transactions you make. Therefore, there are only a few transactions that a bitcoin network can process within a couple of seconds.
According to the calculations, you can process only 600,000 transactions in bitcoin per day. Compared to other payment transaction methods like Visa, it can handle up to 24,000 transactions per second. Hence, there is a capacity of processing up to 2,000,000,000 transactions every day, and hence, it is undoubtedly far better than bitcoin.
According to the further statement made by the analyst, due to the slow clearing process of bitcoin transactions, they will be filed up, and you have to wait for a longer time. The longer you wait, the higher the fees minors will charge for creating a new block. Therefore, the fees for managing the bitcoin transactions can vary from $2 to $60 per transaction. It is the rate between 2020 and 2021, and further, it is expected to increase. For example, suppose that you have a fixed processing fee charged by the big town during the first week of November was $3.65.
On the other hand, the transaction cost charged by the credit card was just 1.3% to 3.5% compared to the bitcoin. For a clear understanding, you may have to pay a 2.4% fee for an online transaction of $169. Hence, you will have to make a tremendous cost to make the bitcoin transaction fee worthwhile.