The Sleeping Giants of Crypto-Enhanced Payment Apps Will Lead the Way

  • Darryn Pollock
    ⭐ Features

    Payment apps like Robinhood, Circle, and Square are clear disruptive forces, and they are enhancing their claim with a growing crypto presence.

The Sleeping Giants of Crypto-Enhanced Payment Apps Will Lead the Way
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When Bitcoin, and by extension blockchain, burst onto the scene and made a mainstream splash, a lot of people touted it as the next big technological wave that will change the world. This is probably still the case, but the wave is a slow-moving one — relatively.

Blockchain technology has been aimed at a multitude of different sectors, some more important than others, and some more receptive. However, it is clear that the area where the most progress has been made is in finance, on the back of Bitcoin.

However, in the progress of adoption as an alternative digital currency, Bitcoin has slowed as the price surge has decelerated, regulators have stepped in, and institutional investors have been coy to jump straight in.

At the same time, there is a sleeping giant that is probably more ahead of the technology wave than Bitcoin, but is also incorporating the digital currency and helping it along with adoption and normalization.

Cash payment apps can comfortably be called currently one of the strongest disruptive elements in finance. They are custom built for millenials who are entering the payment market in a big way, leaving outdated methods like card, and cash, in their wake.

Companies such Goldman Sachs-backed Circle, Square — with its CEO also heading up Twitter — and Robinhood, are apps that are leading the way, and are also all benefiting from incorporating cryptocurrencies.

Square Cashing in on Crypto

Recently, Square released their third-quarter shareholder report, and it includes $43 million in Bitcoin revenue. But, before even looking at the impact of Bitcoin on their revenue, which equates to about five percent, Square’s general growth is indicative of the mobile payment app movement.

Overall, they’ve made 51 percent more than they did last year up to this point, and revenue is 68 percent better than they did during the same quarter of last year. Bitcoin sales are not massive, but they still represent a decent portion of total revenue.

That $43 million revenue did not represent much profit, equating to about $500,000 because of a deduction of Bitcoin transaction costs. However, it has also become clear that these payment apps that incorporate cryptocurrencies are not looking for profit just yet.

Robinhood is the biggest proof of this, as they announced that there would be zero-fee transfers on their cryptocurrency trades in certain areas.

Looking to the future

It is clear that these payment apps understand their role in revolutionizing the finance system, and are looking to the future with a number of clever initiatives, not to mention the integration of cryptocurrencies as they continue to be a factor.

In fact, Circle has even gone so far as to integrate its own version of a Stablecoin, which is also becoming an important feature of the cryptocurrency space. Circle offers USDC for the more traditional investor to use in order to mitigate the infamous volatility of cryptocurrencies; although currently, that is not the case.

As these payment apps continue to try and lead the financial revolution, at the forefront of a critical tipping point, their actions will be influential in the eventual adoption of cryptocurrencies.

Hand in hand

The way in which payment apps and cryptocurrencies are working together could be a key and mutual partnership. There is no doubt that cryptocurrencies are aiding in making payment apps a bit of money, but also helping aid their popularity, but on a bigger level, these apps are helping digital currency.

The cryptocurrency space is still finding its feet and trying to reach more adoption, but this will only really come with more normalization and use-cases for them. Through these payment apps, cryptocurrencies have a platform where they can act as easy currencies for anyone to use.

The best use-case currently for blockchain and these cryptocurrencies is as a digital currency. So, as these payment apps operate with digital forms of currency — as in digital money forms of fiat — there is an easy transition there.

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Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?

  • Yuri Molchan
    ⭐ Features

    Stablecoins show hardly any volatility compared to Bitcoin and altcoins, many are hoping that they will be able to bridge new crypto economy and regular fiat money

Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?
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Bitcoin, the father cryptocurrency, emerged in hope that it will remove all intermediaries in electronic commerce that cut off their share of payments. BTC was perceived as a P2P way to replace fiat cash in an electronic format, which would enable one party to pay another without any financial institution or payment platform which would demand its share of a transaction as a reward for its services.

What is wrong with Bitcoin

For quite a while Bitcoin was performing the way the crypto community expected. But the situation changed later – BTC rate became weaker, thus bringing down its financial and economic reliability, when it gets to be used as a regular means of payment.

You cannot have a currency that would cost like a British castle today, a gram of gold – tomorrow and a pack of French fries the day after.

At that point practical fintech minds came up with an idea of creating something which would become a breakthrough in the universe of crypto – a so-called stablecoin.

Will stablecoins solve the volatility problem?

Technically, stablecoins are protected from the volatility roller-coaster that Bitcoin and other cryptos love to ride. They are programmed to keep their prices stable and investors now are largely attracted to this new type of digital assets.

Stablecoin does not show any volatility in its monetary value, since it has a fixed connection to an asset it is pegged to. The major goal of using stablecoins is taking the best from decentralized crypto coins and combining it with a constant value. Thanks to it, stablecoins can be used as a reliable means of trade.

Asset-pegged stablecoins

Asset-backed ones get their value from an asset as can be understood from the name. An asset provides the necessary value to a coin, as well as the necessary legitimacy.

A great example of an asset-pegged stablecoin is Tether (USDT). In spite of a series of scandals at the end of last year, it remains the most popular stablecoin in the crypto market.

Recently, it has partnered with the Tron Foundation to launch a Tron-based stablecoin.

Other examples are TrueUSD (TUSD), USD Coin (USDC), the Gemini Dollar (GUSD), and the Paxos Standard (PAX). They are all pegged to the USD.

Crypto-backed stablecoins

Some digital coins work in a similar way to fiat-backed ones, however, they are pegged to collateral crypto. That means that crypto assets that ensure the value of such stablecoins are stored in a wallet similar to escrow.

A good example of a crypto-pegged token is Maker, which is ranked 16 on CMC.

Algorithmic stablecoins

Even though, stablecoin can be interesting at first thought but the way they are built goes against the principle of decentralization that crypto coins have as a foundation. Thus, many crypto fans and evangelists are positive that stablecoins must be linked towards not a centralized asset but a computer algorithm which takes value from a balance between supply and demand.

Basis is now considered the most promising algorithmic stablecoin of all.

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Can stablecoin ensure smooth future for the crypto industry?

The primary goal of all crypto assets was and remains to come up with virtual asset that would be liquid enough and not vulnerable to market volatility. From this point of view, stablecoins are a dream of all crypto fans and evangelists of a decentralized economy.

Apart from the potential to conduct crypto transactions smoothly, experts believe it can bridge the two worlds – fiat and crypto, bringing them a mutually beneficial coexistence. However, that may take time.

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