During the recent Blockstack Summit 2017 event, there was a panel discussion on the usefulness of digital currencies, such as bitcoin, for payments. The panel featured 21 CEO Balaji Srinivasan, Lightning Labs co-founder Elizabeth Stark, and Yours CEO Ryan X. Charles. Additionally, Adamant Research Editor in Chief Tuur Demeester moderated the discussion.
In addition to discussing the potential of digital currencies for various types of online payments, the panelists also shared their thoughts on the decreasing dominance of bitcoin in the digital currency space.
Although the bitcoin price has reached all-time highs over the past few months, the world’s most prominent digital currency has also seen increased competition from altcoins.
The Promise of Bitcoin for Payments
When the panel was asked why digital currencies are supposed to be useful for payments in the first place, Srinivasan noted that cryptocurrencies are useful for payments that are very large, very small, very fast, very international, or very automated.
Srinivasan added that most of those use cases have held up, with the possible exception of small payments due to the increased US dollar-denominated transaction fees seen on the Bitcoin network over the past couple of years. Having said that, the 21 CEO also believes this use case will eventually come back to the digital currency space.
Srinivasan also discussed the possible usefulness of digital currencies for those who wish to easily get paid online.
“Right now, there’s a major hole on the Internet where you can go and put your credit card into a website, but most people don’t put their bank account into a website to get paid,” said Srinivasan. “The ability to spin up a new address and get paid very rapidly without actually setting up a bank account is something that’s a major advantage with digital currency. I think that’s one of the biggest advantages of it from a payments standpoint.”
During Stark’s response to this initial question on the usefulness of digital currencies for payments, she dismissed the meme of buying cups of coffee with bitcoin.
“It’s not that hard to buy coffee right now,” said Stark. “But I do believe that what these technologies and currencies will do is it’ll enable use cases that weren’t previously possible because you just couldn’t send one cent a million times per second, for example, for a machine API call or to access a mesh network.”
Charles pointed to his own company, Yours, during his response, and he made a key point on the topic of regulation.
“From our point of view, as a business, we would rather not be a custodian of our users’ funds,” said Charles. “That’s not what we’re doing. We’re not a bank; we’re not a payment processor. If we can not be in the business of being a custodian, we would prefer that.”
By using a layer-two, blockchain-based payment network, Yours is able to route payments on behalf of their users without taking control of the funds.
Towards a Multi-Digital Currency Future?
While the participants in the panel discussion were happy to see Segregated Witness move closer to activation on the Bitcoin network, they also discussed some of the issues they’ve seen with the world’s most prominent blockchain as a payments platform.
“I’m still extremely bullish on bitcoin as an investment,” said Srinivasan. “I think as an investment and as an innovation it’s still a huge thing. As a technology platform to build on top of it, it may or may not be the best thing to build on top of.”
“The network effect [around bitcoin] has been broken in the sense that you do have Ethereum coming up, you have all these other coins going up, [and] there’s this explosion of coins all across the space,” Srinivasan added.
Going further, Srinivasan noted that Zcash offers an option for privacy, Ethereum is useful for programmability, and something else might show up that is optimized for smaller payments.
With these bitcoin alternatives in mind, Srinivasan later added, “I think it’s definitely going to be a multi-coin future.”
“I’m still bullish on bitcoin,” Srinivasan later clarified. “I still think it’s going to get to maybe even a trillion dollars, competing with gold.”
Charles added that he abandoned the philosophy of “bitcoin maximalism” earlier this year, although Stark noted that Lightning Labs has no plans to move away from Bitcoin at this time.