Bitcoin Commerce: Fact Or Fiction?

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One of the great promises of bitcoin has always been its use case as a currency. Many have touted the ability to transact more cheaply, quickly and without boarders as one of the key benefits of bitcoin as a medium of exchange.

Also, much of the debate regarding block size has revolved around a growing concern about having ample ‘overhead’ to allow for transaction growth.

However, beyond the daily transaction numbers (which some might argue are a dubious measure of actual commerce occurring with bitcoin) little is known about the volume of transactions which are directly related to commerce (i.e. people purchasing goods and services with bitcoin).

Having said this, occasionally a bitcoin merchant processor will release some data in relation to their volumes that helps us see some of the general trends.

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Last week Bitpay (one of the biggest bitcoin merchant processors around) released some interesting data in relation to ‘the state of bitcoin transactions’. Here’s a quick summary of the more interesting points:

  • Greater than 100,000 merchants worldwide are now accepting bitcoin. Bitpay says that it services “…more than 60,000 of those”.
  • Europe leads the charge as the highest transaction volume region that Bitpay services. According to their data, “…in the first two quarters of 2015, we have seen transaction volumes rapidly accelerate, reaching an all-time high of 102,221 transactions per quarter (34,074 per month).”
  • So far in 2015, the largest percentage increase in transactions took place in Latin America. In fact, “from February to March 2015, [Bitpay] saw the volume of bitcoin transactions in Latin America more than triple.”
  • A high volume of transactions are occurring outside the US. Bitpay says “less than 1/3 of our merchants are now located in the United States…”
  • Bitpay says they have merchants in 91 countries worldwide.
  • In terms of industries, the highest level of Bitcoin acceptance as a payment method is in IT services.
  • Interestingly, Bitpay notes that only 2-3% of their total transaction volume is spent within the gaming industry – which many have seen as potentially leading the charge in bitcoin acceptance.
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Overall, in spite of the increasing number of transactions over the last year (it has roughly doubled) there is still a huge question mark over whether bitcoin as a currency is something we should even still be talking about. Further, given the rather low volumes a company like Bitpay is processing – it seems many holders of bitcoin are still hesitant to use their coins for actual commerce.

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