- Coinbase Co-founder and CEO Brian Armstrong shared an interesting perspective on the future of payments on Twitter.
- Armstrong now calls a comparison of this advancement in communications with payments.
- Armstrong makes the argument that with the advancement of cryptocurrencies and blockchain technology where transaction fees are negligible.
Coinbase Co-founder and CEO Brian Armstrong shared an interesting perspective on the future of payments on Twitter, where he says that the innovative technology that the reduction in transaction fees can be compared the innovations that reduction in messaging fees over the past century.
In a nutshell, Armstrong says that during the 1800s, people used to send an average of a single letter in a month. This was largely due to the high costs involved in sending letters over long distances.
One hundred years later, with the arrival of telephones, communication became slightly more widespread with more accessibility with relatively reduced costs in transacting data over larger distances. Even though the costs were lower, it still wasn’t fully affordable to many.
In the past couple of decades, with advancements and innovations in communication technology, the transaction cost for data has gone significantly down to the point where it is almost negligible, and this has bought forth an average of 40 messages in a single hour.
Not only did this enable a new degree of communication accessibility, but it also brought forth a multitude of new innovations, including memes, video calling, voice messaging, emojis, digital stickers, etc. It also introduced universality to communication, making it accessible to any person on the planet without any boundaries.
Armstrong now calls a comparison of this advancement in communications with payments. There are only about 40 transactions on average per month per individual in America. This also comes with a transaction fee of 2% with every credit card transaction incurred by the merchant and by the payee when a higher value transaction is made.
Processing of transactions takes a long time, too, while making the entire system work just at a local level. Exchange rate fees, transfer fees all come into play when a global transaction is made.
Armstrong makes the argument that with the advancement of cryptocurrencies and blockchain technology where transaction fees are negligible and the system is global, the kind of innovations that will be brought forth will be very interesting to see.
He says, “Every upvote on a website could be a transaction, an email you send with priority access, your self-driving car changing lanes or the goods you’re exchanging in your virtual world.”
This will also make the payment system accessible globally with no single governing authority, thus decentralizing it. This is the promise and potential the cryptocurrencies hold, and Armstrong holds great hope in the open financial system that crypto will bring about in the coming decades.