There are numerous reasons why a merchant may be hesitant to accept digital currency payments. In many cases, coins become popular quickly but then fade into obscurity, so there's no guarantee that customers will still be using today's trendy token in a week or a month. Perhaps even more importantly, volatility continues to reign supreme in the cryptocurrency space, even among the biggest coins by market cap. This could wreak havoc on a merchant's financial operations. Nonetheless, a recent report in Coin Telegraph indicates that 75% of American consumers wish to have the option to use cryptocurrencies to pay for the items they buy in stores. Growing public demand is likely to tip the scales toward cryptocurrency payments eventually, although many stores are reticent.
One of the biggest questions which remains to be settled in the debate over whether and how to incorporate digital currencies into the payment systems of traditional businesses is which coin or coins will be best suited to the task? Below, we'll examine some of the reasons why bitcoin or other altcoins could be the best choice.
As the leader of digital currencies, bitcoin enjoys more than just the largest market cap and the most prominent name. In fact, bitcoin is at the front lines of cryptocurrencies making headway in traditional stores. One report suggests that close to 4,000 new stores around the world have begun to accept bitcoin in just a year.
Many of the reasons why bitcoin might be the best option for a store considering accepting cryptocurrency payments are clear. Bitcoin is the most popular digital token available, and it has been since the cryptocurrency movement began. Stores worried about whether a large enough pool of customers will trade in a particular token should have their fears allayed by bitcoin. With close to 28 million bitcoin wallets in existence, the number of bitcoin users is quite high. As of March 2018, about 5.15% of Americans owned bitcoin, more than competitors like ethereum. Co-founder of crypto-merchant search engine Spendabit, Devan Calabrez, suggests that "BTC is by far the dominant cryptocurrency for transaction. This is likely due to the maturity of BTC, its 'brand recognition' and the momentum of bitcoin."
Bitcoin has also been one of the most resilient coins over the past several months of turbulence in the digital currency realm. This might also enhance its perceived approachability for many merchants. On the other hand, that bitcoin has preserved its value better than many of its competitors could also be an argument against its incorporation into traditional merchant payments, as investors may be disinclined to get rid of bitcoin that they own if they think it will continue to gain value.
Altcoins, the large group of cryptocurrencies which fly somewhat under the radar in comparison with bitcoin, have some compelling reasons for adoption as well. While bitcoin's high volatility, transaction times and fees can cause a barrier for many customers not eager to risk spending more than they need to for small purchases, altcoins can provide cheaper and faster transactions. BTC has the highest transaction fees of all major digital tokens, with the current average transaction fee at around $0.72. An alternative like litecoin, for instance, is just a fraction of that: litecoin's transaction fees on average are just above 5 cents. Bitcoin cash and dogecoin are even lower, with only a fraction of a cent in fees per average transaction. Of course, these fees change all the time, so there's no telling whether this will hold true forever.
Many altcoins also offer faster confirmation times than bitcoin. This is appealing to both customers and merchants for obvious reasons. On the other hand, though, altcoins carry risks associated with being smaller and less popular than bitcoin. A merchant can never be truly sure if an altcoin will remain viable or popular.
For some merchants the decision between bitcoin and altcoins is an easy one: just accept a variety of different tokens and call it a day. For others, it comes down to one or the other. As time goes on, it will become clearer which coin or coins come out on top.