A new survey has revealed that Bitcoin might still be struggling to make a dent as a medium of exchange, as companies are still not using them as payment methods.
The survey was conducted by popular programming community website StackOverflow, which surveyed almost 90,000 developers, representing companies from different verticals in the U.S. The study shows that 80 percent of the organizations don’t make use of blockchain technology.
Four percent of the respondents use blockchain for currency-related applications, 12.7 percent use blockchain for non-currency purposes, and only a meager 2.1 percent accept cryptocurrency-based payments.
StackOverflow also revealed that developers based in India have a higher propensity to respond positively to the use of blockchain technology in their companies.
An industry-wide dry spell
For companies that are using bitcoin payments, their volumes seem to be dropping. A report by news outlet Reuters in November 2018 cited a research effort by blockchain analytics firm Chainalysis, which asserts that there has been a significant reduction in the use of Bitcoin (BTC) for processing commercial payments.
In preparing the report, Chainalysis reportedly took a survey of 17 Bitcoin payment processors. The firm reported that the amount of digital currency handled by these processors reduced by about 80 percent from January to September 2018.
The stability of the asset’s price was a significant reason for this slump. The report noted that while many believe that the currency’s relative stability will result in a higher level of mainstream adoption as a payment method, it still hasn’t been enough to sway the opinions of larger financial institutions.
Although Chainalysis recognized an improvement in the level of Bitcoin stability, the value of Bitcoin payments reportedly plummeted, dropping from $427 million in December 2017 (which was the height of the crypto boom) to $96 million in September 2018.
Regulatory clarity remains the biggest hurdle
The recent report might reveal the current landscape of the industry, but blockchain remains a technology that has the potential to change various sects of our lives.
Organizations and governments have explored the use of blockchain for various purposes, including managing supply chains, keeping records, and much more. However, most of these functionalities represent only a fraction of its potential; a lot more work will need to be done to make it attractive enough to be used as a payment method.
According to an October 2018 research report by auditing and advisory firm Deloitte, blockchain would need to overcome the hurdles of slow payment processing, poor interoperability, increased resource use, inadequate collaboration, and complex regulations.
PwC’s 2018 Global Blockchain Survey also points out the issue of trust as a primary barrier to the adoption of blockchain technology as a payment method.
The report noted that while blockchain technology and cryptocurrencies were built on the foundation of trust after the 2008 global economic crisis eroded the faith of many in the traditional financial system, the lack of regulatory clarity has restricted many organizations and governments from adopting blockchain payment services
The researchers wrote:
“The majority of regulators are still coming to terms with blockchain and cryptocurrency. Many territories have begun studying and discussing the issues, particularly as they relate to financial services, but the overall regulatory environment remains unsettled.”
With all of these reports, it’s clear that regulatory obscurity is the significant barrier that blockchain technology needs to overcome in its quest to become a globally-adopted payment method.
While it’s receiving attention in certain areas, there is always the possibility that financial regulators could outlaw the technology any day. If this happens, companies that have already adopted them would be faced with short deadlines to move their entire payment infrastructure from blockchain to any of the traditional methods that they already turned their backs on.
To avoid such issues organizations have chosen to avoid the technology for the time being, while they monitor its progress on the regulatory front.