A report released by cryptocurrency payment service provider BitPay shows that cryptocurrencies are becoming increasingly popular with U.S. consumers as a retail payment method. However, the report also details why large-scale adoption of cryptocurrencies for payments is still years away.
There are multiple use cases for cryptocurrency, including lending, storing value, gaming and tokenization. But to this day, it is still primarily associated with payments. Despite a strong push from suitable “payment tokens” such as Bitcoin Cash and Litecoin, cryptocurrencies have yet to have a significant impact on the world of retail payments.
In this regard, several factors have hindered the adoption of cryptocurrency payments. Issues include transaction speed and cost, volatility, liquidity and convertibility, security, and counterparty risk. In order to make the experience as smooth as using a Visa debit card, many organizations believe the solution lies in developing an appropriate second tier solution.
A second layer solution is any secondary or additional framework that runs on top of an existing blockchain. They typically exist to increase speed and scale, but operate independently of the primary blockchain chain.
At the same time, public interest in using cryptocurrency payments is on the rise as increasingly fluid second layer solutions become available. 46 million consumers will use cryptocurrency payments, according to BitPay’s report
PYMTS partnered with BitPay to produce the “Cryptocurrency Payments Report,” a survey of U.S. consumers’ perceptions of using cryptocurrency as a payment method. The company surveyed 8,008 U.S. consumers, dividing them into current cryptocurrency users, former cryptocurrency users, and non-cryptocurrency users. Assumptions about the overall U.S. population were derived by extrapolating the results.
Highlights of the report include that 16% of Americans currently or have owned cryptocurrency. 29% of consumers are likely to buy cryptocurrency, whether they own it or not. The report also found that all categories of subjects, users, former users and non-users, are keen to buy and use cryptocurrencies in the future.
Eighteen percent of the adult population is likely to use cryptocurrency to make payments, which is approximately 46 million consumers (including 17 million non-owners). Those who make purchases report buying everything from jewelry to groceries, as well as big-ticket items, including real estate.
Unsurprisingly, given its top-ranked market capitalization, Bitcoin is the most widely held cryptocurrency, with 80% of cryptocurrency users currently owning it. Despite the strong willingness to use cryptocurrencies for payments, PYMTS estimates that only 1% of retail sales will be paid for with cryptocurrencies in the next 12 months. They say there is a huge gap between merchant acceptance and consumer interest.
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