Payments and blockchain technology—what’s happening right now?

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These days, it’s more common to see digital currency advocates celebrate that a payments company (e.g., PayPal) has offered their preferred token for sale than to see them celebrating payments companies building on blockchain-based protocols.

This isn’t how it was supposed to be. However, while many have forgotten the original purpose of Bitcoin and other digital currencies, it hasn’t been forgotten by everyone. Some interesting and disruptive developments related to payments are happening right now. Let’s take a closer look at some of them.

Micropayments

Satoshi Nakamoto mentioned micropayments multiple times in his first public post. He said small, casual transactions many times in his Bitcoin white paper. However, it seems that BTC advocates and many others have forgotten or deliberately dismissed this.

Yet, micropayments are alive and well. Right now, the Bitcoin protocol (BSV) processes millions of them per day. Not long ago, BSV processed more than 20 million micropayments in a single day, but even that is only scratching the surface of what it’s capable of. Blockchains like Solana are also capable of micropayments, but unfortunately, they continually encounter baked-in scaling issues that cause them to fail under pressure.

Today, micropayments are already leading to all kinds of interesting use cases. For example, the Instant Leaderboard Payouts technology developed by Haste Arcade delivers thousands of daily micropayments to players who finish on leaderboards within the arcade. This is only possible thanks to the extremely low fees on Bitcoin SV, wherein the average fee is just 1/1,000th a cent.

Due to the tiny payments it enables, Satoshi’s invention is capable of transforming the world in a plethora of different ways. In-game payments, the direct monetization of content by artists and publishers, and the elimination of minimum limits on online payments are just some of the obvious ways micropayments could disrupt things.

To get some fascinating points of view on why tiny payments are a big deal, check out the series by the same name on Issac Morehouse’s YouTube channel.

Tokens

Tokens, tokens, and more tokens, it seems the world is coming down with digital tokens of all kinds, doesn’t it? From non-fungible tokens (NFTs) to governance tokens that give voting rights over protocols to tokens redeemable for real dollars and cents, the lifeblood of the blockchain and digital currency industries are tokens.

Right now, most of the 13,000+ tokens listed on the popular tracking site CoinGecko.com are worthless and serve no purpose other than to enrich their issuers. However, that doesn’t mean that the concept of tokens should be discarded. When issued on scalable blockchains like Bitcoin SV, they can serve all kinds of interesting purposes.

For example, imagine a world in which an online gamer is issued tokens to play in a casino rather than having to deposit their own cash. Or how about one in which loyal attendees of a local cinema or theater are issued NFTs that entitle them to perks like free movie tickets and comped sodas? Tokens can also have less tangible use cases, such as giving access to private computer systems and networks or restricted areas of a building. They can also act as certificates of authentication and other such things. The use cases for tokens are truly endless.

Regretfully, most early Bitcoiners didn’t understand that it had and still has the ability to have tokens issued on it. Don’t believe it? Check out the ever-growing list of tokens now on Bitcoin SV. On a scalable, low-fee blockchain like BSV, the sky’s the limit as far as exciting use cases for digital tokens go.

Stablecoins

Stablecoins have become a huge deal in the past several years. Although there’s lots of suspicion around the rapid growth of the market leader Tether, there are plenty of other options.

Stablecoins promise a few key benefits; the ability to cash in and out of digital currencies quickly and easily, the ability to send payments in tokenized fiat currencies that aren’t as volatile as most digital currencies, and, when done right, the ability to hold one’s money in a token backed by real cash or cash equivalents.

Stablecoins have become a huge business. Their recent rapid growth has seen investment firms like Blackrock and Fidelity invest in USDC-issuer Circle. The demand for stablecoins is evidenced in the popularity of stablecoin swapping protocols like Curve Finance. Although the longevity of such protocols is questionable, there’s no doubt that they’re used by many right now.

Yet, most stablecoins have issues that stop them from reaching their true potential even amidst this rapid growth phase. First, and perhaps most obvious, is that most of them live on unscalable blockchains with high fees like Ethereum. Due to this, most potential users realize they would be better off sending a regular bank transfer. Second, stablecoins are viewed by many in the digital currency space as ‘centralized.’ Issuers like Tether and Circle have the right to freeze tokens, and they have done so in the past. This has led to the rise of algorithmic alternatives like Ampleforth, but so far, these haven’t caught on with the masses due in part to their complexity.

Yet, there could be a solution on the horizon. Accord Money recently released a BSV-based stablecoin. This means users will pay fees of a fraction of a cent to move a USD-pegged token anywhere on the planet in just seconds. Accord Dollar is still a new project, but it truly has the potential to disrupt the established order in the stablecoin sector. Let’s see how it plays out in the coming months and years.

CBDCs

Central Bank Digital Currencies (CBDCs) are one of the most controversial concepts in the industry. People tend to love them or loathe them, but they’re coming whatever one’s position on them. Countries like China have already released the e-CNY, and trading blocs like the European Union are well on their way to developing the digital euro.

CBDCs have the potential to massively transform the way payments work. They could allow governments to settle trade balances in seconds, allow central banks to make direct payments to citizens, bypass the retail banks, and almost certainly lead to faster, cheaper, safer payments for everyone.

However, CBDCs have their critics, and with good reason. Privacy advocates worry about the potential for ‘Big Brother’ governments to monitor and snoop on citizens’ financial activities. There’s also a legitimate concern that ‘cancel culture’ could spread to canceling people’s ability to pay for things should they do something deemed politically incorrect or too critical of their governments.

Despite all of this, the rush toward developing CBDCs continues unabated. The list of countries developing them is too long to reproduce in full here, but it includes Russia, Israel, Iran, South Africa, Japan, and India, to name but a few.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Learn more at the BSV Global Blockchain Convention in May

If these concepts and their implications for payments interest you, why not learn more from industry experts at the BSV Global Blockchain Convention in Dubai this May? The event will take place on May 24-26, and if you can’t make it to Dubai, there are online tickets available, too!