How Emerging Fintechs are Bringing Practicality to Bitcoin


Bitcoin has become one of the most exciting entities in modern finance. Blinking into existence in 2009 as an alternative decentralized digital currency, it was hoped that BTC could ultimately replace fiat finance like the dollar to deliver fairer global economic ecosystems.

Although Bitcoin has rarely strayed from the headlines over the course of the past 12 years, it still seems hard to imagine a future where’s we’re paying for our morning coffees in BTC. However, fintech and the emerging decentralized finance (DeFi) ecosystem may soon bring far greater levels of practicality to Bitcoin and the wider world of crypto.

In the past year, great strides have been taken to enable BTC payments to become more prevalent around the world. It became possible to buy a Tesla with Bitcoin, and to go shopping using BTC wallets. Recently, El Salvador opted to adopt the cryptocurrency as legal tender domestically.

However, despite recent advancements in Bitcoin use cases, many experts are still sceptical about the practicality of BTC beyond being a store of wealth.

(Image: CoinGecko)

One key concern regarding the practicality of Bitcoin is that the cryptocurrency is simply too volatile for everyday use at this stage.

“If you bought a $50,000 Tesla with four bitcoins on October 1st, that purchase now has an opportunity cost of $212,000 because bitcoin’s dollar price has risen from $10,000 to $53,000 in those four and a half months,” Robert Minter, Director of Investment Strategy, Aberdeen Standard Investments recently told Markets Insider. “That type of volatility is unsuitable for transacting in an economy.”

However, BTC can still make for an excellent asset should users seek to prioritize the convenience of a decentralized currency that’s widely used beyond borders ahead of more stable fiat units of finance. With this in mind, it’s perhaps unsurprising that emerging fintechs are already actively helping to bring far more usability to Bitcoin on a global scale.

Bringing BTC into Everyday Usage

Although practical use cases of crypto are still relatively scarce, investing in cryptocurrencies is heading into the mainstream – with at least 6% of Americans reportedly owning or transacting with crypto tokens last year.

We’ve also seen early adoption occurring with some of the world’s largest organizations, and many large companies are entering the cryptocurrency space by offering crypto cards – which can pave the way for quicker and more frictionless transactions.

While the likes of PayPal has been ramping up their efforts to accommodate BTC and various altcoins, emerging fintech firms like Marqeta have taken the step of pushing Bitcoin towards the world of physical finance by powering the launch of various crypto payment cards.

Responsible for the US launch of the Coinbase Card, the Shakepay Card in Canada, and Fold – a Bitcoin rewards debit card – Marqeta stands as an example of how fintechs are helping to pave the way for far more practical use cases for decentralized cryptocurrencies like that of Bitcoin.

Ethereum’s DeFi Dominance

Bitcoin remains the most notable example of decentralized finance in crypto today. As the first player on the scene, the world’s most famous digital currency is still going strong today – however, BTC faces a tough level of competition in terms of usability from Ethereum.

Ethereum’s more adaptable blockchain has inspired a range of decentralized apps (DApps) that can capitalize on the cryptocurrency’s fresher and more advanced features.

DeFi and fintech can go hand-in-hand when it comes to delivering advanced financial services like blockchain-based loans and smart contracts that can instantly broker complex transactions between businesses without the necessity of a middleman.

DApps make heavy use of the Ethereum blockchain network, but that’s not to say that Bitcoin doesn’t have a functional DeFi ecosystem of its own.

(Image: DeFi Pulse)

With over 200,000 BTC locked in DeFi today (some $8.7 billion at the time of writing), there’s a clear and thriving ecosystem surrounding the world’s oldest cryptocurrency.

Bitcoin’s DeFi ecosystem is populated by many fintechs that are built on DeFi solutions to make BTC far more accessible for all.

Notably, Bitcoin plays host to Lightning Network, a decentralized network that uses smart contract functionality in the blockchain to enable instant payments across a wide network of participants. The range of DeFi projects within Bitcoin is broad, and analytics services like Token Terminal have also risen to the fore – which consists of a dashboard that provides more traditional financial metrics for crypto-assets and DeFi products.

Significantly, there are plenty of projects that have grown to bring far greater practicality to Bitcoin for users – including a wide range of crypto wallets like Trust Wallet, Enjin, Bitpie and Eidoo. We’ve even seen Bitcoin’s DeFi ecosystem deliver LN Markets, a margin trading platform allowing individuals to trade derivatives on the cryptocurrency’s Lightning Network.

The rise of these DeFi assets has the potential to combine with emerging fintech projects in the wider world of finance, like Connectum, which is a platform that helps to deliver borderless finance through multi-currency processing, one-click payments and 3D secure transactions to help money travel globally on a seamless scale. Connectum uses artificial intelligence security antifraud system called Securita all while always updating security measures with the latest tech to reduce fraudulent chargebacks.

As the DeFi and fintech ecosystems continue to grow, we’re likely to see the practical applications for BTC and other cryptocurrencies develop at an exponential rate – making everyday usage far more likely in the future.

Despite Bitcoin’s erratic price performance in the 12 chaotic, wildly successful years following its initial launch, advancements in the field of fintech and DeFi alike may mean that one day we may yet find ourselves regularly buying that morning coffee in BTC.