In the 10 years since the Bitcoin genesis block was mined and the first public blockchain was born, the sector has come a long way.

In the 10 years since the Bitcoin genesis block was mined and the first public blockchain was born, the sector has come a long way.

But it is not necessarily simple to see which cryptocurrency is the most widely used as a payment method.

For the purposes of this article we will discount Ripple, or XRP. While XRP is used as a payment method, their xRapid platform is not intended for p2p, rather as a cross-border institutional and payment method for banks.

The p2p state of play

Financial regulators tasked with protecting retail and institutional investors and users are coming to similar conclusions on which crypto-assets can be defined as forms of payment.

In the UK, the Financial Conduct Authority (FCA) Crypto-asset Taskforce determines there are three main types of crypto-asset:

Security tokens: Those tokens which provide rights to ownership, repayment of capital, or entitlement to a share in future profits. They may also be transferable securities, as defined by the EU’s Markets in Financial Instruments Directive II (MiFID II). This is legislation which underpins the vast majority of financial rulings across Europe. The FCA defines security tokens as falling within their regulatory boundaries.

Utility tokens: Tokens which can be redeemed for specific access to a product or service. See infrastructure crypto-assets below. Utility tokens do not fall inside the FCA’s regulatory scope.

Exchange tokens: Crypto-assets such as Bitcoin, Litecoin or Bitcoin Cash which are decentralised payment tokens with their own public blockchain and are not issued by a central bank or governmental authority. These tokens are usually used as a means of exchange. The FCA finds that payment or exchange tokens shall generally not be regulated by the authority.

These distinctions are becoming common to regulators worldwide.

The European Banking Authority, which recently set out policy directives calling for legislative clarity across the bloc, splits crypto-assets into three groups.

First, it recognises investment tokens, which grant the owner rights or entitlements similar to stock dividends; second, utility tokens which are not used for payments but instead give the user access to blockchain-based services such as cloud storage; and third, payment tokens (cryptocurrencies) such as Bitcoin, which include stablecoins like USDT or Tether, and are generally used as a medium of exchange.

Outside of the regulatory environment, the picture is a little more fuzzy. Every coin designed as a currency - along with those that are not - can be used for p2p payments.

For example, smart contract and dApp platforms Ethereum and EOS have their own internal currencies: ETH and EOS. These are infrastructure crypto-assets. Their intended use is to pay to carry out operations on their blockchains. But each coin is still used as money. In the case of freelance job site Ethlance, blockchain engineers are paid exclusively in ETH.

On the face of it, Bitcoin would be the best option for p2p payments. It makes up over half of the entire cryptocurrency market capitalisation and is by far the best known crypto-asset of all. It has a huge first mover advantage. So much so that media articles regularly use Bitcoin as a shorthand for all cryptocurrencies.

Which cryptocurrency is most used as money right now?

Usage statistics are hard to come by, and determining an individual coin’s popularity is harder than it sounds.

Complicating any analysis is the fact that cryptocurrency transactions are pseudonymous.

While it is possible to trace wallet addresses and link them together, it is much more difficult to tie that address to a particular person or business. And multi-currency wallets allow anyone to set up multiple addresses within the same wallet if they want to hold BTC, ETH, DOGE, NANO or BSV in the same place.

So how do we measure usage?

Is market cap a good measurement? Not really. It’s only market price multiplied by circulating supply. But it does give us a broad strokes overview of popularity.

Exchange traded volume is not a particularly helpful metric as it is subject to simple manipulation. According to the Blockchain Transparency Institute, as much as 80% of major exchange volume could be faked with wash trading, where users load up buy and sell orders at the same time.

Transaction volume, too, is easily inflated. First, it is difficult to distinguish between one wallet sending thousands of spurious transactions a day, and thousands of actual users paying for things.

Secondly, you can’t see exactly what a transaction is on-chain: you can’t prove what moving coins from one wallet to another indicates. Along with p2p payments, lots of other things are rolled into transactions, like updating or creating an asset, or voting on changes to consensus mechanisms. This part of the transaction is obscured, unavailable by design.

Blocktivity and other data modelling programs attempt to answer the question by splitting blockchain operations away from transactions.

In February 2019 their top 10 in terms of seven-day average sees EOS lead with 30.1m operations. Second is WAX, at 5.2m transactions. Telos (TLOS), BitShares (BTS) and Steemit (STEEM) all over a million operations, while Bitcoin has 805,000 and ETH 435,000. DOGE, Litecoin (LTC), NANO, DASH, ZCash (ZEC) and Monero (XMR) all make the top 20 with five-figure levels.

We can also use to compare seven-day active addresses, which represent the number of unique sending and receiving addresses over the course of a the last week.

Bitcoin (BTC) is way out in front with 620,000, Ethereum (ETH) second at 176,000. DASH has 94,000 addresses active every week, meme coin DOGE 82,000, and LTC 67,000.

According to the latest benchmarking study by Cambridge University’s Judge Business School, around 38% of registered users are active at any one time. They write: “Millions of new users have entered the ecosystem, but remain passive. Total user accounts [grew by] nearly four times in 2017, doubling again in the first three quarters of 2018.”

Combining our best educated guesses would put Bitcoin as the most used cryptocurrency.

Store of value vs method of payment

Bitcoin was intended as a p2p payment method to bypass greedy banks in the wake of the 2008 financial crisis.

But its scarcity means it is attractive as a store of value for long term investors: as ‘digital gold’.

Many users buy Bitcoin as a hedge against global stock market volatility: its low correlation with other assets makes it an attractive option.

And HODLers are deterred from using their investment to pay for coffee, or pizza, in case the value of Bitcoin goes up drastically over the longer term.

As Bitcoin engineer Jimmy Song details here, consumers already have a wide variety of fast, cheap and convenient options when it comes to paying p2p. Quite apart from cash, contactless debit or credit cards, there is Paypal, Apple Pay, Samsung Pay, Venmo, Square’s Cash App, and many others.

“All these payment methods are much more convenient than Bitcoin for nearly every type of transaction (restaurants, brick and mortar stores, e-commerce, etc). For method of payment, convenience is paramount and that means merchant acceptance,” Song writes.

What a crypto-asset actually needs


Adoption is a huge part of payment usage. It’s no good being able to send payments in a fraction of a second, anonymously, anywhere in the world, with zero fees, if the person (peer) at the other end does not accept that particular coin.

The ability to pay in your chosen crypto-asset is king. Adoption for the most part comes down to visibility and sentiment. And while merchant adoption fell as transaction cost rose throughout 2017, the numbers are coming back in Asia and Africa as word spreads. Bitcoin is still the most visible cryptocurrency and hence the one most likely to be adopted.

Transaction speed

Confirmations that a transaction has gone through and has been accepted by the merchant and the consumer are vital for payments. Scalability affects this greatly. A congested network means for longer confirmation times.

Bitcoin has an artificially imposed block size of 1MB. With an average of 2000 transactions per block, and a new block mined every 10 minutes, this gives us an average transaction time of 200 transactions a minute, or 3.33 transactions per second.

That’s far too slow to compete with what’s already available. Visa is the most commonly-cited example with 6,000 transactions per second. Upwards of 800 million Visa cards are in circulation worldwide.

The devs behind the 2017 hard fork that created Bitcoin Cash proposed that Bitcoin needed to drastically increase its block size to run more transactions per second.

By the time 2018 rolled around, Bitcoin Cash devs had a serious disagreement on how big that block size should be. Another hard fork on November 15th led to the market crash and created Bitcoin SV and Bitcoin ABC.

Bitcoin SV says it can increase the block size to gigabytes within years, exponentially scaling the number of transactions able to be included in a block and drastically increasing throughput.

Low or no transaction fee

Some admin fees are expected to help run the network. You may pay 1% - 3% to your bank to allow them to process a debit card transaction.

In December 2017 with the bull run at its height, Bitcoin transaction fees reached as much as $55 each. The mempool was completely clogged and the network congested. As of February 2019, transaction fees sit at a much more reasonable $0.01.

The lower transaction fee the better. NANO claims to have zero transaction fees, for example.

In conclusion...

Despite many pretenders to the crown, Bitcoin is still the most used cryptocurrency p2p payments.

Altcoins like Bitcoin SV, DOGE and NANO have good reason to claim a better user experience but their value is unproven and they will need to be spectacularly good over the course of the next few years to overtake Bitcoin.

A cryptocurrency’s integration with mainstream technology will give us the best indication of where the market is headed.

When Twitter and Square CEO Jack Dorsey claims Bitcoin will be “the currency of the internet”, people tend to listen. His Bitcoin-friendly Cash app is now the sixth-most downloaded finance app on Google Play, and is more popular than Paypal’s Venmo.

Along with technical aspects like transaction speed and fees, UI is seriously important. When real regulation arrives and cryptocurrency moves beyond the early adopters into the mainstream, user-friendliness will take precedence.

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