The quick answer is yes. In fact, we already have a prime example — cryptocurrency. The true question is whether or not this new payment system is good enough to replace our current online payment systems.
First off, what exactly are the payment systems that we currently have?
Briefly put, an electronic payment system is defined in this article as an electronic medium that allows buyers to make electronic payments without the need for cash and checks. One benefit of using electronic payment systems is that the probability of error is reduced to almost nil, because the process is automated and the calculations are done by the computer.
Now, I’m not saying that the use of Blockchain is prone to error. In fact, it isn’t. Bitcoin transactions are verified and recorded by hundreds of thousands of nodes in the network. This decentralized system ensures that everybody is kept in the loop about the transaction without having to rely on a single monetary authority to monitor the transaction. Basically, everyone’s eyes are on your transaction.
Try to picture that in an ordinary scenario. Surely, not everyone and their mother would want to know that you just purchased a pair of 200-dollar Nike Air Max 270s from your favorite online shoe merchant. And not everyone would want to verify your transaction and record it after.
Now, look at the bigger scheme of things. You aren’t going to be the only buyer and that store isn’t going to be the only merchant. You are literally talking about millions of transactions on a daily basis. I’d rather not do the math, especially if, hypothetically, we adopted a P2P payment system as the universal payment method.
Wouldn’t you rather just keep your transactions between you and your seller instead? And wouldn’t your seller rather keep track of just the transactions between him and his buyers?
Even if you reserved the P2P payment method for high-value transactions, it still wouldn’t justify the exorbitant transaction fees that miners charge in order for them to verify your transaction. This fee is in place to reward miners who allot time and other resources in order to process a transaction. The folly here is that these transaction fees are not strictly regulated. Miners can charge however much they want to charge; if you don’t pay a sufficient amount, they might not even process your transaction at all.
To put this into perspective, this article states that the transaction fee in the first quarter of 2017 was $2.40. This might look like a small amount to most people, but just a quarter earlier, the transaction fee was just $0.024. This increase is a mute but eloquent testament to the volatility of Bitcoin.
And this type of volatility simply will not sit well with the Average Joe and Jane.
So, can a P2P system become a payment system? The answer is yes, but it wouldn’t be practical as a universally-accepted method of payment.
Nothing beats good electronic payment systems. They are simply the best that we can currently come up with based on the technology and knowledge that we currently possess — and there’s nothing wrong with that. Why reinvent the wheel after all?Opinions expressed here by Contributors are their own.