Can Bitcoin be the Future of Digital Payments?

Abstract: This study aimed to investigate the conditions in which Bitcoin has developed as a leading cryptocurrency and, according to Nakamoto (2008), could become an instrument for everyday payments around the world. In comparison to other digital payment solutions, Bitcoin is based on a peer-to-peer electronic cash system using “the blockchain”. This innovative technology allows for decentralised storage and movement of currency in a fully anonymous way, introducing advantageous methods for encrypted security and faster transactions (Hagiu & Beach, 2014).

Scepticism regards Bitcoin’s foundation, energy consumption and price volatility, however, did not take long to arise (Holthaus, 2017). Ten years from its white paper release, Bitcoin is further supported by the same drivers which could sustain its growth as the future of digital payments (Russo, 2018). In order to investigate the key drivers and feasibility of acceptance, a London based survey was used to understand the desirability of Bitcoin as a day-to-day tool for digital payments. Additionally, this research analysed Bitcoin’s stakeholders and forecast drivers of sustainability for its application to become the future of the payment industry. A space which relies on policies that involve multiple layers of society, governments, regulators and tech-firms, all on a global scale.

The findings confirmed how the increasing lack of trust of political and financial institutions, coupled with the increasing cases of data-breaches by tech-firms, encouraged over 70% of respondents to consider more decentralised and anonymous methods for their day-to-day actions; like payments. Policy makers need to cope with societies increasingly separating politically but gathering together digitally (LBS, 2017). For Bitcoin to truly establish itself as a global digital payment solution, key stakeholder acceptance must converge alongside the introduction of more robust regulation.

Key words: bitcoin; digital payments

        JEL codes: M