The Ugly Truth about BTC as a Payment Option

BTC

The laser-eyed squad of Bitcoin maximalists along with the ever-growing price of the first cryptocurrency might make you think BTC is both an incredibly profitable investment and a panacea for the struggling world of online payments. And while the former might be true – after all, Bitcoin has successfully survived all previous bear markets and is forecasted to soar to $100,000 by the end of the year – the latter statement seems absurd as the BTC transaction fees skyrocket every time the price of the popular asset rises.

So could high fees become the end to a seemingly unshakable dominance of Bitcoin, or will Lightning Network save the day? And most importantly, will Bitcoin continue to be a payment option at a casino online? Without further ado, let’s indulge in some speculation here.

The Crypto Multiverse Turns on a Dime, and so Does Bitcoin Dominance

If we jump to early 2017 and further back – for that, we can use the BTC dominance chart from Tradingview – we can see that BTC occupied the lion’s share of the market, never less than 95%. However, whether it was due to the lack of development in Bitcoin itself, the rise of competitive cryptocurrencies, or both factors, starting from 2017 and until now BTC has been steadily losing its dominance, and it seems the worst is yet to come.

Back in the days, you could send any amount of BTC with a negligible fee of a fraction of a cent to a few cents, just like it was designed by Satoshi Nakamoto, a pseudonymous founder or founders of Bitcoin. At the time of writing, though, an average transaction fee exceeds $6, but even this exorbitant amount is a far cry from dozens of dollars you have to pay for a single transaction any time BTC surges in price.

As a result of the improper development – or some would say the absence of development – Bitcoin ceased to be an efficient means of transferring money over the internet and started to be a ‘store of value,’ as BTC maximalists aka BTC whales now sell it. However, it’s an open question if a currency that cannot be effectively used as a currency (any currency must have six qualities: utility, divisibility, transportability, scarcity, durability, and be counterfeit-resistant) can win the race against superior competitors.

Can Lightning Network Effectively Scale Bitcoin?

Now, many bitcoin enthusiasts consider Lightning Network, a second layer on top of the BTC network, to be a game-changer. And though there’s some truth to that – Lightning Network can speed up transaction processing times and thereby decrease transaction fees – the offered technology produces more problems than it solves:

  • First of all,  nodes are required to be online at all times, which means you have to be online to make payments. What’s more, you have to use your private key to sign in, meaning there’s a chance your coins could be stolen unless you’re using a cold storage device.
  • Secondly, you have to pay a fee to open or close payment channels, which means you have to possess some BTC in the first place (also, there’s a routing fee charged for transferring BTC between channels).
  • Finally, the very process of using Lightning Network is not user-friendly at all and requires specific knowledge, which makes it unattractive for most people.

The Bottom Line

If BTC remains as inefficient as it is now, it will inevitably lose its dominance along with the crown of the number one crypto, most likely a scalable and cheap-to-use cryptocurrency.

However, neither casinos nor merchants care – they just incorporate the best crypto, and that’s it. The same applies to punters: they do not care whether the crypto they use for deposits and withdrawals is called Bitcoin, Ethereum, Bitcoin Cash, Cardano, or Ripple, but they do care about lightning-fast, cheap, secure, and private payments, which BTC can no longer provide.