Bitcoin: From Digital Gold to Everyday Currency

As the world starts to harness the power of AI models, we have entered a new age of money, marked by the adoption of the scarcest asset the world has ever known. 

Previously, bitcoin was long described as “digital gold,” a store of value designed to hedge against inflation and preserve wealth. However, a groundbreaking report co-authored by Danny Stagg of Breez and Dan O’Prey of 1A1z reveals that bitcoin is rapidly transforming into something far more dynamic: an everyday currency that’s reshaping how we transact in the digital age.

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The rise of bitcoin payments

The report places emphasis on the seismic shift in bitcoin’s utility, driven by the maturation of its Lightning network. This second-layer solution has expanded bitcoin’s reach to over 650 million users worldwide, making transactions faster, cheaper, and more scalable than ever before. Major players in the general cryptocurrency space, like OKX, Kraken, Binance, and Coinbase, have integrated Lightning, responding to real demand and laying the foundation for a truly global, open payment network.

One of the most exciting developments is the emergence of internet-native payments. Product builders can now explore groundbreaking ways to share value, including streaming payments, micropayments, and real-time global transfers. These innovations are reshaping how we exchange value online, embedding entirely new utilities directly into products.

The report showcases how businesses are proving bitcoin’s real-world utility. Global companies like Pick n Pay, Namecheap, and Mercari have added bitcoin payments, demonstrating the impact of bitcoin as a viable payment method. These implementations are improving user experiences, reducing costs, and providing global accessibility across various sectors, from retail to remittances and luxury goods.

Here are the astonishing numbers: 

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Why use bitcoin for payments?

• Cheaper transactions: Traditional payment systems are expensive, with credit card networks and cross-border remittances often charging hefty fees. Bitcoin changes this paradigm entirely, offering a way to move money electronically at a fraction of the cost. For instance, transferring hundreds of millions of dollars on-chain can cost less than $10, while smaller bitcoin payments using Lightning can settle in real-time for fractions of a cent.

• Real-time settlement: Unlike traditional finance, where settlement can take days or weeks, bitcoin payments over Lightning typically settle within milliseconds. This instant availability of funds is a game-changer for businesses and individuals alike, as there’s no delay between the exchange and having the funds in your hands.

• Open network: Bitcoin offers permissionless peer-to-peer payments, overcoming the increasingly pressing obstacles that traditional payments face. This open network approach is particularly crucial in an era where concerns about financial censorship are growing, even in developed nations. No outside entity can prevent you from spending or storing your bitcoin where you’d like to.

• Global access: Bitcoin payments provide effortless value transfer across jurisdictions, addressing the uneven distribution of financial services worldwide. Whether it’s sending funds to a creator in South America or facilitating cross-border remittances, bitcoin enables access to a truly global financial system.

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Bitcoin in action

The Breez report presents three compelling case studies demonstrating bitcoin’s growing adoption as a medium of exchange:

1. Mercari: From Trading to Payments in Japan

Japan’s leading online marketplace with over 23 million users, launched a bitcoin trading service in March 2023. The initiative was a huge success, attracting over two million users in just 12 months. Building on this momentum, Mercari introduced bitcoin as a payment method on its marketplace in February 2024, seeing over 100,000 bitcoin payments in the first month of launch.

2. Pick n Pay: Bitcoin at the Checkout

The payment processor became the first major African retailer to accept bitcoin payments in February 2024. Through a partnership with MoneyBadger, customers can pay for goods, utilities, and clothing using bitcoin directly at the register. The company reported that Lightning payments are currently the fastest payment method at the till, comparable to ‘tap-to-pay’ card payments, but with lower fees than credit or debit cards.

3. Namecheap: Internet Domains for Internet Money

The domain’s business integrated bitcoin payments back in 2013 and enhanced its offering through BTCPay five years ago. The company has seen impressive growth, with a 285% increase in total average monthly customers paying with bitcoin from 2023 to 2024. Bitcoin payments have generated $73 million in revenue for Namecheap since 2020, demonstrating that when given the option, users want to pay with bitcoin, and it’s good for business.

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The thriving bitcoin payment ecosystem

Node software: Foundational to the success of bitcoin payments are Lightning Node Clients, with primary implementations including LND (Lightning Labs), Core Lightning (Blockstream), Eclair (ACINQ), and LDK (Spiral).

Liquidity & service providers: Companies providing liquidity, hosting, and Lightning-as-a-Service platforms are crucial for enabling businesses to accept bitcoin payments. These include exchanges and brokerages, Lightning-as-a-Service solutions like Breez and Lightspark, hosted services such as Blockstream’s Greenlight and Voltage, and Lightning liquidity providers like LQwD and Lightning Network+.

Consumer payments: A wide range of companies support consumer payments, from custodial and self-custodial wallets to neobanks and remittance applications. Notable players include PayPal, Blink, Xapo Bank, Nubank, Strike, and Bitnob.

Consumer applications: Bitcoin and Lightning payments are unlocking new applications and use cases, particularly in social media, crowdfunding, gaming, and streaming services. Platforms like Nostr, Geyser, THNDR, Fountain, and Wavlake are leveraging bitcoin payments to create innovative user experiences.

Merchant acceptance: Payment processors like MoneyBadger, BitPay, and BTCPay are making it easy for merchants to accept bitcoin while offering incentives to consumers. Rewards and gift card services like Fold, Satsback, and Bitrefill allow consumers to earn bitcoin for everyday purchases.

Merchants and non-profits: Bitcoin payments are now accepted across multiple verticals, from retail and consumer goods to luxury items and non-profit donations. Companies like Mondo Convenienza, Mercari, Hublot, Ferrari, charity: water, and The Water Project are at the forefront of this adoption.

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The future of payments is already here

As we argue at Sovreign, bitcoin is undoubtedly the future of payments. And that is also most certainly what Breez’s & 1A1Z’s report concludes: that bitcoin is already a viable currency for everyday transactions, with its adoption often invisible due to its decentralized nature. 

Dany Stagg & Dan O’Prey argue that the key to further growth lies in leveraging new tools to bring new utility, integrating bitcoin payments into everyday mainstream products, and helping developers build with bitcoin. As the ecosystem continues to grow and mature, the foundation for a new era of internet-native payments powered by an internet-native currency is being laid. 

The moment to act is now. Putting your business on the Bitcoin Business Standard is one of the highest-leverage moves your business can make for its future. By embracing bitcoin today, individuals, businesses, and developers can reap the gains of the new peer-to-peer bitcoin economy, freeing themselves from the friction and disruptions in existing payment markets, and paving the way for innovative payment methods previously unimagined. 

Stagg and O’Prey’s report is a powerful wake-up call to those who still view bitcoin solely as a store of value. It paints a vivid picture of a dynamic, evolving ecosystem that’s rapidly transforming bitcoin from digital gold into the currency of the future—a future that, in many ways, is already here!

Contact us today with any questions you have about bitcoin. Our consultants specialize in serving as your trusted guide to adopting the future's payment technology.  

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