Analysis Reveals 85% Drop in BTC Merchant Usage
As per a recent report by Chainalysis, Bitcoin is currently dropping in terms of utility by Merchants and commercial uses in general. According to the survey, merchants use of BTC hit the top at $411M in 2017 and dropped to about $60M in May of 2018, displaying an 85 percent decrease in overall BTC use as a cryptocurrency, or currency in general.
The research was collected and calculated by studying payment transactions through several services including BitPay, GoCoin, and others, apparently totaling almost $70M in June 2018. The drop in usage was attributed to Bitcoin slowly losing its appeal as a valid currency and method of purchasing products and services. Head researcher at the ICSI, Nicholas Weaver, said that BTC is not a usable currency and that its net cost usually and greatly surpasses that of credit card transactions.
Bitcoins uses have shifted from payable currency to unpredictable investing as per the report. In addition, Bitcoin’s unpredictable nature and volatility hinder several potential uses of the coin for transactions. Senior economist at Chainalysis, Kim Grauer, has stated that given its volatility and the rapid increase in price last year, a BTC could be worth $1K in a single day through spending.
Transactions for BTC are usually incredibly expensive and unreliable inconsistency. As transactions themselves climb in numbers, so do the fees associated with them, climbing to around $50 USD in December of 2017. Even taking the decrease of incentives into consideration, several alternative uses for the coin have been discovered. Multicoin Capital partner, Kyle Samani, said that many of the individuals that are not core believers in BTC agree that it must be used as a payment tool to be considered as money.
He then refers to Tushar, his co-founder, and explains in the same way that Bitcoin will be considered a currency or money the more people use it. A prime example of such a use is by paying digital merchants and vendors with BTC due to its much cheaper transfer as opposed to traditional money methods.
Many websites online allow customers to shop and spend crypto at their online venues. Overstock provides its customers and users to purchase furniture and other home appliances by paying with Bitcoin and have seen their sales double since introducing BTC spending. Sonny Singh, the chief commercial officer of BitPay has said that within the last half year, the company has seen large spikes in companies paying their online vendors in BTC and this includes law agencies, accounting companies and more.
Additionally, he states that BitPay a rise in bills paid in cryptocurrencies by companies. More research has revealed that liquidated BTC is often used to pay for products and services in cash. Graham Tonkin of Mosaic is known to pay his credit card charges with BTC.