Crypto companies are making payments incorrectly as they are not taking into account the most important people: the end consumers. This year, it was reported that cryptocurrency investors were facing delays when trying to withdraw funds deposited on the Ethereum blockchain. Due to its significant software upgrade, Ethereum was having trouble processing instant transactions, resulting in ether worth around $1.4 billion being stuck in a withdrawal queue. This showed the limits of Ethereum as a financial infrastructure and how it has yet to be used in mainstream payments, commerce, and finance.
Despite these issues, Ethereum remains the most decentralized smart contract blockchain within the crypto world. Its proof-of-work (PoW) consensus model makes it easier to validate transactions on the network, while its low barrier to entry allows anyone with the ability to set up a miner to do so. Bitcoin has gained acceptance as a payment method for businesses, but its volatility remains a barrier to wider adoption. Handling payments on Bitcoin networks can allow for increased profits, yet its value drop can lead to significant losses. Furthermore, the network can only process a certain amount of transactions within a certain timeframe, such as a block.
International payments through stablecoins on blockchain networks could provide an improved experience over traditional fiat transactions due to their increased speed. However, the overall UX for crypto transactions is still lacking integration with existing systems and accessibility. Poor UX is everywhere in the crypto world, and this leads to users losing money, inadequate security, and sub-optimal user adoption.
The biggest challenge facing transactions on these networks is their limited transaction processing capabilities, which leads to high fees and slow transaction times. Bitcoin has experimented with scaling up, such as the Lightning Network, a layer-2 solution built on top of the Bitcoin blockchain. Its primary goal is to address Bitcoin’s scalability issues, allowing for cheaper and faster transactions. Despite its challenges, Bitcoin continues to be embraced as an alternative to traditional payment methods.
Ethereum is also growing due to the popularity of its dApps in areas like gaming, finance, and technology. However, it has considerable issues that must be addressed, such as accessibility and scalability. Addressing these problems is key to widespread adoption, but the network is still faced with many challenges. If these issues are not solved, it is difficult to predict whether Ethereum will be able to compete with its competitors. Investing in Ethereum comes with some disadvantages, such as scalability problems, code issues, and its supply.
To ensure the worldwide adoption of cryptocurrencies, we need a network that can handle a large number of transactions without delays or processing issues. The network must also be able to handle the growing amount of transactions in the future. The transaction capabilities of networks like Bitcoin and Ethereum are still quite low, and the demand to carry out these transactions will only grow.
In conclusion, it is clear that crypto payments will only have a future if all the minor things that make up an excellent experience and seamless payments are understood. Understanding these can help address the current challenges of transaction processing, fraud, volatility, and the user experience, whilst still ensuring advantages such as the potential for profit and anonymity.
Daniele Servadei is a 20-year-old Italian entrepreneur on a mission to transform online payments and ecommerce. He is the CEO and co-founder of Sellix, a digital ecommerce platform for entrepreneurs. It allows startups to bring their products to market and accept payments without a single line of code in a matter of minutes. His vision is to pioneer a future where any entrepreneur can sell digital goods and accept payments online quickly and easily. He’s making it simple for people to turn their ideas into profitable businesses.
