Head of cryptocurrency at Visa, Cuy Sheffield, has pointed a lesser research area where Bitcoin can outshine fiat currency.
The cryptocurrency expert believes the arena could bring more adoption to the cryptocurrency industry since the fiat currencies are not performing in the realm.
Sheffeild, who has been a performer of the financial service firm, posited in a long thread on Twitter that Bitcoin research needs to be more effective in micropayment arena.
The industry’s expert argued that there are many areas where Bitcoin could outperform traditional dollars or stablecoins in the future, saying the use cases and scenarios can drive mainstream consumers to spend Bitcoin more.
Sheffield said people, today, explicitly purchase Bitcoin purposely to spend. He however, noted that the increasing improvement of ramps, will call for a shift in the nearest few years when consumers will be able to spend Bitcoin without explicitly buying it with new applications.
The Visa employee said there is at present a “little to no direct benefit to average consumers of spending Bitcoin for any brick and mortar or online purchases that they are able to spend dollars on today”.
He said users of Bitcoin has to figure out how to acquire Bitcoin and endure the volatility and ensure that merchants who you want to transact with accept the digital currency. Sheffield said all these reduce the adoption potential of the digital currency.
Key Adoption Area
Pointing at a key adoption area, Sheffield said the only reason consumers would want to spend Bitcoin is if they could spend it in payment flows that they cannot make today with dollars.
For example, he mentioned microtransactions under 1 cent appears to be the only payment use case, that Bitcoin fulfils today that is not possible in dollars and some notable fiat currencies.
The crypto expert said microtransactions are generally a single area where dollars is not functioning today.
Sheffield said two major barriers prevent dollars from functioning in this area. The visa employee said the first one is the fact that existing payment networks were not designed for sub cent transactions and the fact that there’s no name for a dollar based unit of account that represents an amount of value below 1 cent.
“Have you ever heard an average person refer to the price of something as fractions or basis points of a cent?,” he asked.
He concluded that Bitcoin already has a native unit of account called a “sat” that can function in the microtransaction arena.
Sheffield added: “Bitcoin uniquely has a native unit of account called a “sat” that currently represents 1/100 of a cent while BTC is $10k. The brand of “sats” is far from mainstream, but it could already be the most recognizable global unit of account to represent value < 1 cent.”
While noting that there’s nothing on the internet that can be purchased in USD for under 1 cent, however, if over 1000 developers are able to build an open tech that allows the creation of “apps with micropayments for item and services that cost between 1/100 of a cent and one cent”, there is going to be wide adoption of cryptocurrency.
Since dollar has no lesser unit, Sheffield said to win a game where people pay sats to remove ads, tip influencers, join private messaging groups, or buy digital goods emerge, would be add for the fiat currency.
“For dollars to win these payment flows, a new unit of account for sub cents would need to be created and then adopted globally by developers across the world in addition to new or enhanced globally available payment networks designed for sub cent transactions,” he said.