This actually favors credit cards for consumers, because of charge-backs.
Businesses compete for consumers, and consumers use credit cards.
People consume more than they otherwise would because of credit, even if that's irrational... the logic can gets kicked, impulse rules the register. If credit disappeared and all cards were debit only, sales volumes would plummet.
Why use btc for payments
Bit of a chicken an egg problem, Bitcoin isn't a drop-in solution for existing behavior, it creates new behavior.
Bitcoin on-chain is more akin to ACH or Wire transfers than payments, faster and cheaper yes, but still unsuitable at the point of sale.
Lightning specifically could compete at the point of sale technically speaking, but it doesn't obviate the consumer behaviors of credit.
if both parties don't trust each other
Back to the first point, business models have adapted to reality and either accept credit, or are cash only. The latter being relatively rare, and extremely low volume.
So Lightning being a new tool for businesses opens up new business models. That flywheel takes time to get started and the dismal state of Lightning tooling hasn't done it any favors.
We won't see legacy merchants accepting Lightning en-masse until that flywheel gets some momentum, and that has to first happen with new low margin business models that weren't possible before given the cost structure, minimums, and chargeback risks of credit cards. There needs to be a race-to-the-bottom, and then businesses will have to accept Lightning to stay competitive in that race.
Low value, de minimis services with little margin must come first. We're getting a whiff of it with API calls.
It's very costly for a cloud provider for example to eat charge-backs from hacked CC's buying services for mal/spamware purposes. Lightning protects these providers, which means they can lower their pricing, which accelerates the race to the bottom, which means all cloud providers will have to embrace Lightning and machine-to-machine payments just to keep up with the price drops of their competitors who adopted it first.
Only once Lightning tooling is robust enough for machine-to-machine payments at scale can it begin to gain meaningful traction beyond that.
This actually favors credit cards for consumers, because of charge-backs.
Businesses compete for consumers, and consumers use credit cards.
People consume more than they otherwise would because of credit, even if that's irrational... the logic can gets kicked, impulse rules the register. If credit disappeared and all cards were debit only, sales volumes would plummet.
Bit of a chicken an egg problem, Bitcoin isn't a drop-in solution for existing behavior, it creates new behavior.
Bitcoin on-chain is more akin to ACH or Wire transfers than payments, faster and cheaper yes, but still unsuitable at the point of sale.
Lightning specifically could compete at the point of sale technically speaking, but it doesn't obviate the consumer behaviors of credit.
Back to the first point, business models have adapted to reality and either accept credit, or are cash only. The latter being relatively rare, and extremely low volume.
So Lightning being a new tool for businesses opens up new business models. That flywheel takes time to get started and the dismal state of Lightning tooling hasn't done it any favors.
We won't see legacy merchants accepting Lightning en-masse until that flywheel gets some momentum, and that has to first happen with new low margin business models that weren't possible before given the cost structure, minimums, and chargeback risks of credit cards. There needs to be a race-to-the-bottom, and then businesses will have to accept Lightning to stay competitive in that race.
Low value, de minimis services with little margin must come first. We're getting a whiff of it with API calls.
It's very costly for a cloud provider for example to eat charge-backs from hacked CC's buying services for mal/spamware purposes. Lightning protects these providers, which means they can lower their pricing, which accelerates the race to the bottom, which means all cloud providers will have to embrace Lightning and machine-to-machine payments just to keep up with the price drops of their competitors who adopted it first.
Only once Lightning tooling is robust enough for machine-to-machine payments at scale can it begin to gain meaningful traction beyond that.