Recent data shows that the bitcoin network is currently handling more volume than the online payments giants such as PayPal, according to the latest figures.
The bitcoin network will handle an anticipated average of $489 billion every quarter in 2021, according to statistics from blockchain intelligence company Blockdata. This compares to PayPal's average of $302 billion per quarter.
Bitcoin's statistic is still a long way off from the figures reported by the two main payment processors, Mastercard ($1.8 trillion per quarter) and Visa ($3.2 trillion per quarter), respectively.
Customers were able to buy, sell, and spend bitcoin and other cryptocurrencies through PayPal's online platform last year, opening the digital assets up to more than 300 million customers and approximately 20 million active merchants around the world.
The announcement sparked the start of a price rally that has seen the value of bitcoin rise by more than 400 percent in the last year. Due to Bitcoin's soaring price, which has almost doubled in value versus the US dollar in 2021, the number of transactions has increased significantly.
A blog post by Sam Wouters, senior analyst at Blockdata, said that if bitcoin's price rose by 260 percent today to $245,000, the bitcoin network would potentially be processing a similar amount of data on a daily basis to the Mastercard network.
Price is not the only method for bitcoin to catch up, and volume is not the only way to measure the scale of a financial network. The bitcoin network processes approximately 280,000 transactions per day on its base layer (excluding layer two technologies such as the Lightning Network), compared to approximately 366 million transactions per day for Mastercard and 597 million transactions per day for Visa on their respective networks.
According to Mr. Wouters, this is the point at which the distance between the networks is startling, but not without cause.
Closing the gap between credit card users and bitcoin users will require time and a great deal of education on how this new financial system operates. A lot may happen in the next few years, and a realistic projection of bitcoin reaching the size of a payment network like Mastercard or Visa by 2026 may not be that far-fetched after all.
It's astonishing how Bitcoin, a 12-year-old decentralized network, is 27% of the way there in terms of one statistic (volume processed) when compared to Mastercard, a firm that was created in 1966.
Bitcoin's dollar processing volume must expand by 260% to catch up with Mastercard, and by 540% to catch up with Visa. However, despite the fact that these are huge gains, the expanding knowledge and use of Bitcoin, together with continuous innovations in its ecosystem, may lead to the P2P network processing a greater dollar amount in the future.