Which Is A Better Alternative to Money: Bitcoin or Altcoins?
For long, the debate has raged on whether cryptocurrencies can be used as an actual currency in day to day use. Most prominent economists and critics have disregarded this possibility based on the volatility of cryptocurrencies. Renowned economist Dr. Nouriel Roubini has said that they’re “neither a serious method of payment nor a good way to store capital.”
Recent findings, however, claim, that cryptocurrency can be used as regular currency in day-to-day life. Now the question arises about which cryptocurrency is the most viable as money? Bitcoin inevitably tops the list because it is widely accepted all across the globe, but what’s interesting to note here is that other cryptocurrencies are being accepted by more and more companies with each passing day.
Going by Virtual Coin Squad’s fairly accurate listing of companies that accept crypto, it can be deduced that 54 major companies currently accept cryptocurrencies. Except for two companies, all of the others accept BTC; with 25 accepting Litecoin, 15 accepting Dogecoin, 14 accepting Bitcoin Cash, 13 accepting Ethereum, and 12 accepting Monero.
With the widening of the crypto market, an increasing number of businesses worldwide are now other cryptos apart from Bitcoin. Bach Nguyen, the community manager at the Prague-based SatoshiLabs, which runs the Coinmap website said in a statement:
“If I can speak for Prague and the Czech Republic, we have been witnessing wider acceptance of cryptocurrencies. Places that have accepted Bitcoin before started accepting Litecoin or Ethereum. There are even ATMs which offer Bitcoin Cash. Though, Bitcoin is still dominant — it is the cryptocurrency that gets implemented first.”
Different payment services like Coinbase Commerce, which enables merchants to accept payments in multiple digital currencies, are slowly becoming popular. Bitcoin still continues to have its monopoly in this market though.
According to reports, Bitcoin is accepted by 86 percent of the companies that let customers pay using cryptocurrency.
However, the tide might shift soon. As mentioned before, payment services which allow companies to accept various kinds of cryptocurrency are slowly on the rise. Individual countries too are taking steps to make this a more level playing field for the other cryptos. For example, South Korea’s largest exchange, Bithumb, has been partnering with a number of online platforms, including WeMakePrice and Yeogi Eottae. The platforms will be allowed to accept payments in a range of currencies (including Bitcoin, Ethereum, Ripple, Bitcoin Cash, and ICON).
The U.S. too is conceptualizing laws which would enable their citizens to pay their taxes and license fees in cryptocurrencies. Arizona recently passed a bill that compels the state to “study whether a taxpayer may pay the taxpayer’s income tax liability by using a payment gateway, such as Bitcoin, Litecoin or any other cryptocurrency.”
Bitcoin might be topping the list as of now, but it does face some serious challenges. It faces scalability issues, which have not been rectified since the currency blew up in 2017. The Bank of International Settlements (BIS) recently issued a report which concluded that cryptocurrency, especially currencies such as Bitcoin, aren’t scalable enough to serve as money in a global economy.
Bitcoin cash is a prominent rival of bitcoin’s crown but so is Ripple. Ripple, doesn’t use mining in its consensus mechanism and can handle a maximum of 50,000 transactions per second, while Litecoin can work four times faster than its previous version, due to its shorter block interval time.
Kai Stinchcomb wrote in a blog post that the “number of retailers accepting cryptocurrency as a form of payment is declining,”. Her post was based on a single source which was a Morgan Stanley report which found that, out of 500 “top online merchants,” the number of them accepting Bitcoin as payment decreased, from five to three, between 2016 and 2017.
Despite that, it is believed that crypto is becoming more popular as a method of payment. EToro crypto analyst Mati Greenspan says, “It is inevitable and is already happening in some parts of the world. Over time economies tend to go through periods of prosperity and hardships. As long as things are stable, there isn’t much need for an independent currency. But in places where trust in the government and banks is low, that’s where cryptocurrencies tend to thrive.”