A recent report reveals that Bitcoin is inching closer by the day towards overtaking MasterCard in terms of daily transfers. This means that the premier cryptocurrency could soon overtake one of the leading traditional money transfer systems in the world.
Specifically, this news was covered in a fresh piece from the news outlet Trustnodes. Judging by the official numbers released by MasterCard
In the payment behemoth’s latest quarterly report, it seems Bitcoin is becoming a more serious rival than ever.The Bitcoin is close to overtaking MasterCard by the amount of value transferred daily, with bitcoin moving $8 billion in the past 24 hours while MasterCard averages $11 billion a day.
In their recent quarterly report, MasterCard said they processed $4.4 trillion in the year to date, while bitcoin would be at about $3 trillion on a yearly basis if we extrapolate from the daily $8 billion – a level that is fairly common for BTC.
That may be because one cryptocoin is usually worth far more than a dollar. A crypto transaction, moreover, can be in the billions, while MasterCard is usually used to make very small purchases of $20 dollars or so.
Visa handles far more at about $30 billion a day or $11 trillion a year according to their self-disclosed stats. That’s with a capacity of 65,000 transactions a second.
Bitcoin can handle only about 7 tx/s on chain, or about 0.01% of Visa’s. Yet bitcoin transfers about 25% of Visa’s amount of value processing.
It isn’t very clear why so many bitcoins are moved daily, usually at circa 5%-10% of its market cap. One could say these are transfer to and from exchanges, but all bitcoin exchanges handled about $7 billion in trading volumes during the past 24 hours.
Cryptocurrencies move high values despite significantly lower transactions per second capacity
Businesses specializing in international transfers, for example, could make just one high value transaction to transfer the funds. Likewise, for someone like BitPay, they could bundle transactions to pay merchants weekly or monthly.
Much of the activity, therefore, probably occurs off-chain, with the public blockchain used sparingly. Yet that off-chain activity must be very considerable if $8 billion is being transferred daily on-chain.
That’s a substantial portion of the entire economic activity in US and Europe. Partly perhaps because bitcoin is fully global, giving it a bigger market and thus presumably giving it more use cases.
Nevertheless, this might be explained by the fact that cryptocurrencies are worth more than one dollar. Moreover, although a cryptocurrency transaction could be worth billions, MasterCard’s volume mostly stems from small purchases.
MasterCard is, however, dwarfed in turn by Visa, which handles daily volumes of around $30 billion. This equals roughly $11 trillion a year, and has a capacity of 65,000 transactions a second.
Bitcoin, on the other hand, supports 7 tx/s on-chain — which would equal around 0.01% of Visa’s transaction capacity. Nevertheless, Bitcoin transfers around 25% of the value processed by Visa.
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