Bitcoin and Crypto Networks Are More Reliable Than Credit Card Systems That Have Service Outages

What happens when your credit card doesn't work? You can't pay your bills. This recently happened to many people last week, not because their credit cards had been canceled or were full, but because the system was down.

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People had reported being left stranded and unable to pay for gas in their cars, restaurant bills or groceries at checkout because Visa Europe had a disruption in their service and prevented some Visa transactions from being processed. A BBC weather presenter tweeted about her unfortunate experience at a restaurant where someone paid for some of her families' dinner.

Looking at the visadown hashtag, someone even posted about how they "bought a loaf of bread with actual money", as if it's some lost method of transacting that they hardly remember. The twitter account for Bitcoin.com even posted about the outage:

Visa is suffering a major network outage and nobody can use it. #Bitcoin hasn't had a network outage in over 9 years. Which one do you think is more reliable?

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Visa's twitter post about the disruption prompted a discussion about cryptocurrencies. Unlike cryptocurrencies that run on a decentralized blockchain network, Visa is centralized, and their payment processing service handles 150,000,000 transactions each day. But their system has a single point of failure (SPF) for all their private servers, and when it goes down, users experience service disruptions and can't get their transactions through at all.

Cryptos however, have multiple nodes that are distributed, usually across many nations. This creates an a more secure protection against failure, especially as more nodes join the network. Even if one node goes down, there are others to take it's place, and the whole network stays up as there is no SPF. Bitcoin has been 99.99% operational and can operate indefinitely. It would be the same as Visa having nodes that people run, and the network could still go on even if Visa closed it's doors. As long as the nodes are online, Bitcoin or other crypto networks stay up.

Blockchain technology is fast being adopted by the banking sector. MasterCard had said it would be happy to adopt state-sanctioned cryptocurrencies, but not others it refers to as "junk", according to CEO Ajay Banga:

"The government mandated digital currencies are interesting. Non-government mandated currency is junk."

China has also been quick to bounce on blockchain tech, as 12 out of 26 major Chinese banks adopted blockchain technology last year, as well as other financial institutions with low-cost instant cross-border payments between different currencies and nations.

But the blockchain technology that underlies some cryptocurrencies, like Bitcoin, have scaling issues. It takes time for a transaction to propagate to various nodes in the bitcoin network for the transaction to be verified. As more transactions come in, things can slow down and lead to longer wait times. This has resulted in higher transactions fees for people to move ahead of the line and get processed quicker.

Some solution are on their way. Bitcoin forked in 2017, with Bitcoin Cash having plans to address scaling issues themselves, while the Lightning Network plans to reduce congestion on the core chain by putting certain processes outside the main blockchain. The future of money will be changing. But how?

Some people only care about making money by getting into something new, while others look at crypto as a way to free themselves from the clutches of financial and legal authorities, without fees or oversight. Other see beyond the mere financial aspects and look at blockchain technology that can revolutionize society to it's core by breaking the the hold that governments have as the medium for upholding law and contracts.

We are in interesting times either way. The competition between mainstream centralized financial institutions and cryptocurrency technology will at least force banks and credit card companies to offer better services by breaking their monopoly over the financial lives of common people. If they don't, they will likely be left behind as people adopt better and more agreeable services.

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References:

• Visa vs. Cryptocurrency — It’s Only a Matter of Time
• Visa says service returning to normal
• Mastercard “Very Happy” to Support [State] Cryptocurrencies, Just Not Anonymous “Junk”
• ‘A Game Changer’: UK FX Brokerage Pilots Ripple XRP for Money Transfers

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