Crypto payments: a dreamy hill to die on

Bitcoin was designed as p2p electronic cash but it found PMF as digital gold instead.

Since then, dozens or hundreds of companies have died on the blockchain electronic cash hill. A dreamy hill of self-custody decentralisation and a deep anarchist hatred for the Fed, IMF, fiat and banks.

Bitcoin works for payments but is very niche. For everyday or smaller b2b payments, it can’t compete with Visa and PayPal because of:

• volatility

• cost

• penetration: chicken and egg of payments networks

• bad account management: self-custody comes at the cost of managing seed phrases, getting hacked

First there was the altchain boom. One example is Dash. They cut cost but failed with the other things. Then the ICO boom happened and mostly went to zero without any innovation in payments.

Then, stablecoins entered Ethereum but gas fees were 100-10000X, so they only made sense when you stood to gain a lot of money.

Finally, years later, stablecoins found PMF with defi as collateral. After all, dollars are much easier to reason about than some volatile asset, when calculating yield. And, more niche, they worked for really really big transactions (and what’s the point when there are only expensive on/offramps taking 1-10% anyway). This was for expert users in finance (horrible account management)

It’s only now that we can really start building. We have all the lego blocks:

• Dencun & L2s make transactions way cheaper

• AA makes account management much safer and easier

• Stablecoins have enough penetration and supporting infra (e.g. bridge.xyz) to use make them usable.

Now is the time.