Source: Blockchain Knight
Original title: Famous American computer scientist: Bitcoin may end the use of credit cards
After DeFi, “institutional investors” may have been a buzzword in the cryptocurrency market, especially after companies such as MicroStrategy and Square have joined this emerging market. Many analysts have expressed interest in this during the institutional boom in Bitcoin purchases. The profound influence expressed opinions.
Paul Graham, a well-known American computer scientist, tweeted, “Possible future situation: Credit card companies are becoming increasingly picky about who they will process transactions for. This has become the reason for the general public to use cryptocurrency in transactions, and eventually end the use of some credit cards. .”
is it possible? Well, let’s investigate, even though the price of Bitcoin is more than twice its fair value, institutions are still buying. The surge in interest in cryptocurrencies such as PayPal and VISA suddenly led to this speculation.
In fact, the co-founder of BlockSpring also commented on the credit card. He pointed out, “My guess is as follows: Step 1, use the existing network to transfer backwards compatible encrypted cards to establish the number of consumers; Step 2, on-board Merchants conduct direct off-chain transactions and instant P2P payments, similar to FBO Venmo/Cash, but use cryptocurrency to pay; step 3, P2P payments are made directly on the chain.”
However, in this case, the biggest challenge is the “money-back guarantee”, that is, when it is lost or stolen, this is almost impossible in Bitcoin debit cards. In addition, due to the rapid popularity of Bitcoin and the growth of alternative payments, decentralized or open banking is entirely possible to completely replace traditional banking systems and payment providers including credit card companies.
There are multiple projects and tokens in the DeFi ecosystem that can provide credit services, and some other functions on the tokens can also be provided at attractive prices. In order to maintain relevance and popularity, credit card companies and open banking APIs can commoditize transaction value, create an ecosystem, and pave the way for CBDC (central bank digital currency). Another interesting result of the Bitcoinization of banks and payment providers may be the emergence of lending and borrowing agreements.
Just like Mastercard joined the Blockchain Digital Identity Alliance last year, more credit card companies may be involved in encrypted digital identity business and lending agreements, and then can use their identity services to reduce risks, which will help the field China’s new loan products and agreements paved the way.
The participation of institutions and the banking industry and the long-term impact of interest in Bitcoin will be bullish, however, in the short term, prices may be further revised based on their on-chain analysis. The unused Bitcoin map highlights the accumulation of Bitcoin Level.
As of press time, Bitcoin, ranging in price from $4,000 to $19,000, has not moved significantly. In addition, there are additional purchases above the $18,000 level, and the purchased bitcoins are kept in the exchange’s wallet instead of being withdrawn.
Unless credit card companies explore solutions to interact with cryptocurrencies, Bitcoin may be heading towards a long-term sustained price rebound , which may put credit cards at risk.
The original text comes from ambcrypto, compiled by Blockchain Knight, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.
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