Many in the crypto space hope that the recession following the COVID-19 pandemic will provide the necessary impetus for mass adoption. Does this mean that soon we will all pay in Bitcoin ? Cryptoprocessing.com analysts are not so sure.

For crypto evangelists, the urgency of the coronavirus is the perfect storm: it is as if various forces are coming together to keep people away from fiduciary money and towards crypto. Quantitative easing can indeed cause inflation, and the currencies of many countries will depreciate as is already the case with the Turkish lira. Bank deposit rates will reach zero or even become negative. Some countries may even default on their debts, causing a widespread collapse of financial institutions, investment funds, etc . Under these circumstances, crypto stands out as a dynamic and bullish market.

However, we need to distinguish between investing in cryptography and using cryptography as money - that is, to pay for goods and services. In order for crypto to replace fiat, it must play both roles. And while the benefits of cryptocurrency as an investment vehicle are obvious, it takes users longer to start viewing it as a normal payment method, much like a bank card or PayPal.

Analysts at Cryptoprocessing.com - one of the largest crypto payment providers in the world - confirm that while there is a steady increase in payment activity, it is not explosive.

Max Krupyshev, CEO of Cryptoprocessing.com, comments:

“In some cases, the growth is indirectly caused by the coronavirus. The iGaming industry is a good example. Now that offline gaming and betting is impossible, people are turning to online casinos and quickly discovering that crypto is the best payment method on iGaming sites. In some areas, they can not pay with a card because their bank blocks the transaction, but they can pay in BTC , ETH , USDT , etc . Lockdown causes an influx of players, which stimulates cryptographic payments. But it's not because users don't want to use trust money at all: they just make a rational choice. "

Therefore, people will switch to payment in crypto when they see that it is easier, faster or cheaper than in fiat. However, the change will be the result of analysis and choice, not an irrational hatred of the banks or a lack of confidence in the government.

Which crypto will become payment coin # 1?

Most transactions processed by Cryptoprocessing.com are in Bitcoin . Will it stay that way?

Using  BTC   for payments poses 3 problems: time, processing costs and opportunity costs. On the one hand, a BTC transfer takes up to an hour to process. Long-term crypto holders are used to this, but it's unacceptable to fiat users. On the other hand, BTC transaction fees can change suddenly, even reaching $ 3-4, as happened after the halving.

At the same time, parts such as the  XRP  of  Stellar  and Ripple offer treatment times of less than 5 seconds nominal fee. However, it is the third factor - opportunity costs - which may prove decisive in the near future.

The opportunity cost means the potential gains you lose when you choose one of the alternatives. When you pay with BTC , your opportunity cost is the profit you could earn by investing it instead.

Max Krypushev continues:

“On Cryptoprocessing.com, we implemented instant payments in Bitcoin and Ethereum , so our users don't have to wait for blockchain confirmations. It's as fast as paying with a card. The real question is, why should we spend Bitcoins that could appreciate 30 to 40% in a year when you can spend other coins, which are not as likely to appreciate? The dominance of Bitcoin in payments is due to the habit of people using it. But as the price starts to rise again after the current withdrawal that followed the halving, I expect the payment streams to move to smaller rooms, like DOGE ,TRX , XLM and XRP . "

What about stablecoins? Can Tether or USD Coin become dominant as a means of payment? Certainly - but only in certain industries. For example, the USDC Terms of Service prohibit paying for any USDC gaming activity . Since iGaming is the main market for crypto payments, this limitation can become a serious problem for USD Coin .

To summarize: in the months and even years to come, a large percentage of users will invest in crypto rather than using it to pay for things online, so we should not expect a payment revolution by crypto. Those who pay in cryptocurrency will likely choose coins with low opportunity costs.

The coronavirus crisis will surely interest more people in cryptocurrencies, although it is impossible to say which coin will gain dominance as a means of payment in a few years. However, it probably won't be Bitcoin .