PwC senior manager: Bitcoin works as a means of payment


Bitcoin has the potential to shape completely new payment methods and methods. Roland Stadler, Senior Manager and Data & Analytics Specialist at PwC Switzerland, is certain of this. In an article on PwC’s website, he shows how crypto currencies work as means of payment, how utility and security tokens differ from each other and why not only the blockchain but also Bitcoin is relevant for the future.

Crypto currencies are a thorn in the side of many representatives of the traditional economy, whether states, central banks or traditional financial service providers. The technology behind the blockchain, on the other hand, is regarded by all these players as innovative and potentially profitable. It is precisely this argumentation that is often heard: Blockchain good, Bitcoin – goes like this. Apple co-founder Steve Wozniak was one of the few who turned the tables and claimed that the blockchain was developing into a bubble – while he was convinced of the Bitcoin.

Bitcoin news as universal means of payment, the remaining tokens rather not

Even Roland Stadler, Senior Manager of PricewaterhouseCoopers (PwC) in Switzerland, cannot understand why the Old Economy is courting the Blockchain and frowning on the Bitcoin news. In his report “Blockchain, but not Bitcoin. Really? the rhetorical question of whether the Bitcoin news didn’t deserve to be rated better.

It starts with a definition of the terms “crypto currencies” and “digital assets” – most crypto assets are not currencies. Only Bitcoin and a few other crypto currencies are actually used as means of payment and as a payment network. Bitcoin has been working without problems for almost 10 years, has never been hacked and – in contrast to many fiat currencies – is deflationary.

Most other digital assets can be divided into utility tokens and security tokens. Stadler describes utility tokens as fuel for a particular blockchain ecosystem. As such, he names, for example, Ether, which would be needed to run an application on the Ethereum platform. Security tokens, on the other hand, represent securities in digital form and are used almost exclusively for crowdfunding. Meanwhile, neither utility nor security tokens were suitable as universal means of payment.

Stadler: Blockchain, but not Bitcoin formula. Really?

So while you can trade and speculate with all listed crypto assets, only the true crypto currencies are suitable for actual use. Utility and security tokens, which he sees as “venture capital,” Stadler, on the other hand, sees the effects of the blockchain hype. Only Bitcoin formula continues to work as a means of payment – and quite well. Range, speed and transaction costs of the Bitcoin formula are not challenged by any other financial network.

“Small to large amounts can be transferred worldwide within minutes. No other financial network is currently able to do this. A retailer can receive payments directly to his tablet or POS system without the help of a service provider. In international trade, where traditional payment transactions sometimes incur very high transaction fees, Bitcoin can bring a considerable cost advantage with fees in the centime range,” says Bitcoin, the report says. The Lightning Network’s scaling solution also holds out a lot of hope.

The bottom line is that Stadler criticizes the promise “Blockchain, but not Bitcoin” because he still does not see a blockchain application that is more suitable as a means of payment than Bitcoin. The development of smart contracts can have many effects in the future, but is still in its infancy. The current ICO hype, on the other hand, should be viewed with caution.

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