Digital gold, speculative object or savings method. Crypto currencies have many use cases. But as a means of payment in retail or online trade, the crypto currencies currently finds very little acceptance. What is the reason for this and what BTCPay Server could change.

Anyone who has been dealing with crypto-currencies, even if not for long, knows: cryptos are volatile. The current crash, in which the crypto market fell into a seemingly bottomless pit practically overnight, proves this fact once again very obviously. In order for crypto currencies to become more attractive as a means of payment, this volatility would first have to decrease. No buyer and no seller can make sensible business plans based on such price fluctuations.

However, payment service providers such as BitPay now offer a remedy against the exchange rate risk. These are so-called Payment Service Providers (PSP), which, like the credit card providers Visa and MasterCard, provide infrastructure for processing digital payments. BitPay assumes the exchange rate risk, as the company receives BTC but passes on fiat money such as euros or US dollars to the seller. This system initially sounds extremely charming. The fees that BitPay charges are really competitive with those of Visa and MasterCard.

But still simply uninteresting from the buyer's perspective

Notwithstanding the above, Bitcoin payment service providers cannot be expected to make BTC mass customization in retail or online commerce. But why?

First of all, it is simply unattractive from a buyer's perspective to make payments with BTC and co. With such high price gains of sometimes over 1,000 percent per year, the opportunity costs of issuing money are simply too high. In other words: Hodln promises a much greater benefit than paying with crypto-currencies. At least if convenient alternatives such as credit, debit or PayPal payments are available. Furthermore, first you have to get hold of the digital gold. This is usually done by means of fiat-to-krypto transactions on one of the many crypto exchanges. This in turn usually costs fees, which are also implicitly reflected in the transaction costs when the money is issued.

On top of this, the concept of "Be your own bank" is both a promise and an obligation. After all, keeping crypto-currencies safe does ensure monetary sovereignty. However, keeping your own crypto assets does not usually save costs or nerves. All of this makes it simply unattractive to spend crypto-currencies in retail or online trade. As long as the alternatives are more convenient, crypto-currencies will probably not be able to establish themselves as a means of payment.

Can it still change?

From the seller's point of view, the acceptance of crypto currencies is already quite attractive, at least as an additional alternative. Even Bitcoin-PSP such as BitPay are currently cheaper than traditional payment methods such as Visa. While Visa charges an average of 2.5 percent of the sales price, BitPay charges only about 1 percent for transaction processing. And this is exactly where there is massive potential. If merchants typically generate a profit margin of between five and ten percent, it reduces the profit by a massive 2.5 percent for each transaction.

Moreover, crypto payments are irreversible. What is certainly less desirable from a buyer's point of view is likely to be a blessing for many sellers. Credit card payments can still be charged back months after the purchase.

It is therefore rightly primarily due to the buyer's side that a broad adaptation of crypto currencies as a means of payment fails.

Let's talk about BTCPay Server

Under Bitcoiners, however, BitPay is not considered a viable solution to the adaptation problem. In addition to the criticism that the US company had earned for its role during the SegWit2X disaster in 2017, BitPay centralization is at odds with what many crypto currencies want to be. A means of payment without the famous "single point of failure". It was precisely this motivation that led to the founding of the competitor company BTCPay Server in 2017.

Whereby the term "company" does not quite fit. Because all products, data and source code are open source.

In contrast to BitPay, BTCPay offers payment infrastructures for retail and online commerce that are much closer to Bitcoin's P2P ethos. More precisely, merchants link their personal wallet to the software and are thus able to accept P2P payments. This brings greater security, lower transaction costs and better data protection.

Although this does not yet solve the incentive problem for customers to pay with crypto-currencies. However, the payment service provider is making a significant contribution to ensuring that payments can be made in the way the ethos of the crypto currency dictates: private, P2P, instant and at low cost.

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