For a large part of its existence, the Bitcoin (BTC) community placed a lot of faith in the cryptocurrency becoming a viable alternative to many centralized payment systems existing in the market. However, BTC currently is mostly used as a long-term investment – an asset much like gold or stocks.
When inspecting how and why this could have happened, it seems that Bitcoin as a payment service was doomed from the very beginning, as its underlying blockchain technology simply can’t scale to compete with industry giants such as Visa, MasterCard, and PayPal.
The main problem is the number of transactions that the network can process. Bitcoin’s absolute maximum capacity is a mere seven transactions per second, while Visa easily handles an average of 150 mln transactions every day, and is capable of facilitating 24,000 tps.
As more and more people started using Bitcoin and sending transactions, the network became bloated. Along with the number of transactions, the waiting times, and most importantly, transaction fees have skyrocketed.
According to blockchain .info’s data, the average waiting time in winter 2018 was in the region of hours, in some extreme cases – hundreds, sometimes even thousands of hours.
It is worth noting that such excessive waiting times were most likely associated with microscopic transactions sent through with tiny transaction fees if any at all. So, miners simply avoided confirming such transactions as it would be a waste of time and resources for them.
Still, for the transaction to go through as quickly as possible, users had to pay massive amounts of fees so that miners will confirm them.
No one is going to use Bitcoin to buy a 3 dollar cup of coffee and have to pay 15 times that amount in fees and wait for a couple of hours until the transaction is confirmed. But still, stating that ‘we accept Bitcoin’ is still a very useful PR stunt for businesses.
However, as of now, Bitcoin seems to have gone over its winter crisis. The waiting times returned to a 10-30 minutes mark, and the transaction fees dropped back to around $1. For now.
Below are a few places where you can actually use Bitcoin to purchase items online.
Overstock They are the first large online retailer to accept and fully Bitcoin payments. You can buy anything from furniture to laptops and television sets.
Newegg is an electronic retail giant and is accepting Bitcoin payments for most of its stock.
Shopify is an e-commerce platform that allows users to create their own online stores similar to Etsy and eBay.
Microsoft is one of the biggest companies in the world and allows users to add money to their accounts with Bitcoin.