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Bitcoin Transaction Volume Surpasses Visa Network
Bitcoin easily surpassed Visa, but it's ACH we should be watching.
The total value settled across the Bitcoin network in 2023 is greater than the payments made on the Visa network: A significant milestone for crypto. However, the properties of each platform are very different, and so are their use cases.
Visa Vs Bitcoin
Bitcoin has often been compared to Visa in discussions about the network's capacity. Visa is built to allow hundreds of millions of customers to make purchases and payments every day. In 2022, the network facilitated around 242 billion purchases, meaning it averaged around 8,000 transactions per second. At times of peak demand, Visa claims that its network can support more than 65,000 payments per second.
Bitcoin, by comparison, supports a tiny number of transfers: Around 7 transactions per second (tps), or one ten-thousandth of Visa's maximum throughput. (This does not take into account L2 platforms like the Lightning Network, which are designed for fast, low-cost microtransactions.) When demand outstrips block space, transaction fees rocket and lengthy delays become the norm.
Bitcoin can't compete with Visa in terms of the number of transactions it supports, but it certainly can compete with total value settled by the network.
What's The Difference?
It might sound impressive that Bitcoin settles more value than Visa (and it is), but the networks are not readily comparable. They are used for very different purposes. There is likely little overlap in the use cases for each network. Bitcoin is decentralized, transparent, irreversible and near-instant; if you care about those things, you won't use Visa, since it doesn't offer these features. (Visa only seems instant; payments have to be batched before they are ultimately settled, and can be reversed for a long time after the transaction is initiated.)
Additionally, the respective fee structures mean they are useful for different things. The average fee for using Visa is generally between 1.5% and 3.5%, but can be as high as 6% when all the possible charges are factored in. Bitcoin has a flat fee; it costs as much to send $10 as it does to send $100 million. Small transactions are uneconomical, large ones very efficient. That, alone, means the platforms are best-suited to different types of transfer. (Bitcoin L1 is not suited, for example, to buying a $5 coffee.) Bitcoin is mostly used for high-value transactions, therefore, while Visa is used mainly for smaller everyday purchases.
The take-home point from this is not that Bitcoin is rivaling Visa as a settlement network. It's that Bitcoin is trusted to move trillions of dollars of value every year, and has not once failed. Higher prices for bitcoin will inevitably mean the value settled on the network increases, potentially overtaking ACH—America's bank-to-bank transfer system—in the coming years. The use case for that (high-value transfers) is much closer to Bitcoin's.
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