Home » Could Bitcoin (BTC) really threaten Visa and Mastercard?

Could Bitcoin (BTC) really threaten Visa and Mastercard?

by Patricia

Another proof of the hype surrounding Bitcoin (BTC) this year? The payment network has overtaken PayPal in terms of volume since Q1 2021. And it could come close to giants Visa and Mastercard in the future, according to a new report.

Bitcoin has already overtaken PayPal in 2021

The tipping point was noted in a recent report by analytics site Blockdata, which looked at the volumes processed by Bitcoin, PayPal, Visa and Mastercard during 2021. It found that Bitcoin outperformed PayPal in terms of transaction volume throughout the year, despite some decline in the third quarter

Volumes of the four payment networks from 2019 to 2021 (Source: Blockdata)

Volumes of the four payment networks from 2019 to 2021 (Source: Blockdata)


On average, Bitcoin processed about $489 billion per quarter, compared to $302 billion for PayPal. Visa and Mastercard remain far ahead, with $3.2 trillion and $1.8 trillion respectively. But cryptocurrency could start to compete with these two giants in the coming years, according to Blockdata.

Will Bitcoin overtake Visa and Mastercard?

The report notes that the cryptocurrency network’s growth has been particularly fast, when compared to Visa and Mastercard:

It is impressive that Bitcoin, a decentralised network that has been around for twelve years, is already 27% of Mastercard, a company founded in 1966, in terms of volume processed. Especially when you take into account that [Bitcoin] is a decentralised movement.

Blockdata notes, however, that Bitcoin is a different network from Visa and Mastercard, as it relies on money storage technology, rather than spending technologies. Still, the payment network could eventually claim the same volumes as the two giants, if three factors are taken into account.

Firstly, the number of transactions should continue to grow, as should the average volume per transaction. Of course, the gap would also close if the Bitcoin price continues to rise. To compete with Visa and Mastercard, however, the average value per transaction would have to increase by +540% and +260% respectively.

The cryptocurrency is also limited by the number of transactions processed. On average, Bitcoin processes 280,000 transactions per day… A drop in the bucket compared to the 597 million transactions processed by Visa daily.

The Lightning Network as a solution

Blockdata reports, however, that one solution could overcome some of the limitations: the Lightning Network. Bitcoin’s scalability solution is gaining traction, especially since El Salvador made it a cornerstone of its adoption of BTC as a legal tender.

According to Blockdata, this could be a game changer:

All publicly available statistics, such as the number of Lightning Network nodes […] or the amount of bitcoins on channels, are growing at an exponential rate. If this continues over the next few decades, it is entirely possible that the Bitcoin network will process the same or many more transactions than some other financial networks.

But there’s a long way to go to get there. As Blockdata points out, the Bitcoin network is still mostly used on an occasional basis, while the Visa and Mastercard networks are integrated into users’ daily habits.

The Bitcoin network is a long way from being able to handle the same number of users as Visa and Mastercard, but no one is saying it could. Getting to that point will most likely take decades.

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