Introduced by Satoshi Nakamoto about 10 years ago, the cryptocurrency Bitcoin was wondered by everyone right after its emergence, and it was in the middle of some claims and discussions about what it was.. The digital peer-to-peer cashless network is intended to bring a decentralized economy that promises faster transactions with minimal commissions.
Bitcoin was invented to end the monopoly of traditional centralized banking systems that have a monopoly on people’s money. As soon as Bitcoin gained popularity and people realized that the digital asset is not just another internet phenomenon, it started making a direct comparison with traditional payment systems such as Visa and MasterCard.. So, the obvious question is where does Bitcoin stand compared to these traditional payment portals? Could it surpass the achievements of Visa and MasterCard?
We will try to evaluate various aspects of both bitcoin and traditional payment portals and see how much Bitcoin has evolved since its inception and whether it has a chance to surpass traditional payment providers.
Visa / Mastercard vs Bitcoin Transaction Speed
Bitcoin as a payment tool directly compares with Visa, MasterCard and Paypal, which was established years ago as a globally recognized US-based. Now let’s compare the transaction speeds of traditional payment providers and see where Bitcoin stands.
Visa / Mastercard –Visa, the world’s most used payment provider, processes 150 million transactions every day. This transaction makes the transaction speed at 1.667 transactions/second over Visa.
PayPal: Paypal is the most preferred limit Transaction providers, processing 193 transactions per second.
Bitcoin:Bitcoin is unlike anywhere near traditional portals and it’s only around 4 transactions/second.
When we look at the number of transactions processed by traditional networks, Bitcoin corresponds to this. The reason for such a drastic difference lies in the use of technology in processing transactions.. Vısa is the fastest payment provider in the world with 1,667 transactions per second and it is unlikely to break this record.. When it comes to Bitcoin, the decentralization aspect, which is a USP, reveals some differences and may be slower than payment providers because of these differences.
When someone makes a request to the Bitcoin network, miners are responsible for verifying the transaction.. These miners are competing against each other to verify the transaction earlier than their peers to receive the Block Reward. Bitcoin block time is fixed at 10 minutes and mining difficulty is increased to maintain fixed block time. This leads to scalability issues that dominate and are a cause for concern among the Bitcoin community.
In contrast, traditional portals rely on a central database, where when a transaction request is initiated, the system simply puts your identity on the network, where the funds needed to initiate the payment checks and processes if everything is ok. It is possible to explain this simply through the POS device.
When you pass a credit card to a POS device as a slip, your card information is read on the machine without typing the password, and as soon as you enter the password, the bank will inquire within seconds whether there is enough money in your account.
When Bitcoin tried to scale its transactions, it became a source of concern for developers and this spawned many off-chain solutions such as the lightning network still under construction. However, even if the Lightning network becomes fully functional, the Bitcoin network will not even come close to traditional methods.
Why Bitcoin Will Never Overtake Traditional Payment Methods?
The answer is centralization, Bitcoin promises a peer-to-peer network where no one can control your money, but it has its fair share of decentralization. Transaction speed is greatly hampered by the design of the Bitcoin blockchain