The launch of Bakkt is the biggest story of 2019 in the world of cryptocurrency, and the company's partnership with Starbucks has attracted the most attention. Let's take a closer look at some of the details of this collaboration to see what impact the world's largest coffee chain might have on Crypto.
Our vision is to bring digital assets into the mainstream through efficient transactions between consumers and merchants
– Bakkt (@Bakkt) January 15, 2019
-The coffee can not be paid with crypto (direct) …
After a first arousal, when the Bakkt partnership was announced as early as 201
What Starbucks will do is contribute to the development of software tools that allow customers to easily exchange their BTC for fiat currency to buy coffee and other products. This functionality could be well integrated into the existing mobile app or be a stand-alone system – either way, BTC payment at Starbucks becomes much easier.
– but it could still be huge to accept
Although Starbucks will not actually hold any BTC at any point in time, the new system will nonetheless create an important new use case for crypto and pay more attention to everyday consumers Bring crypto space. 19659005] Read more: 5 reasons why it is not too late to enter the crypto
There were 29,324 Starbucks stores worldwide in 2018, 14,400 of them in the United States. The company planned to open around 2100 new stores worldwide in 2019, bringing the total to around 31,400. Starbucks' total revenue for fiscal year 2018 was an impressive $ 24.7 billion compared to $ 22.4 billion a year ago. That's about $ 67 million a day.
The world's third largest fast food chain obviously sells more than just coffee and other hot drinks, but these account for a significant portion of Starbucks sales, and that's interesting to see how the characters collapse. The company generates between 3 and 4 billion cups per year, or about 8 million cups per day. If we go from an average price of around $ 2.50 to a cup, that's nearly $ 10 billion a year – almost half of the company's total revenue.
What about Bitcoin?
Although crypto and coffee are two completely different markets, it's worth comparing the figures for Bitcoin with Starbucks to get an idea of the order of magnitude. While Starbucks posted more than $ 2 billion in revenue from 2017 to 2018, Bitcoin moved in the opposite direction. The total market capitalization of Bitcoin is currently around $ 68.8 billion (14 March 2019), compared to $ 276.6 billion at the beginning of 2018.
Latest data suggest there are around 32 million Bitcoin addresses worldwide. To put it bluntly, this means that the average Bitcoin wallet has slightly more than 0.5 BTC, which is worth about $ 2,000. However, these numbers are likely to be slightly distorted by the "whales" with particularly large BTC stocks.
We could assume that anyone holding Bitcoin worth hundreds of thousands of dollars is likely to be a HODLer or a speculator who sees his BTC as an investment, unlike someone who wants to spend it on a regular basis. Current data shows that only 11 percent of Bitcoin users, or around 2.3 million people, use it to make payments.
Read more: 2018: Review of a bitcoin and cryptocurrency year; What could make Bitcoin mainstream again?
Do customers want to use Starbucks Bitcoin?
If we assume that a significant proportion of the 2.3 million regular Bitcoin users also assume The Bakkt launch, which regularly visits its local Starbucks, could immediately lead to hundreds of thousands of BTC daily Coffee shops are facilitated by Fiat Currency and the new Starbucks software tools. In addition, the possibility of using BTC in Starbucks could also lead to a significant increase in the total number of Bitcoin users.
Although most transactions are still over-the-counter with cash or cash-in-hand, Starbucks is not new to digital payment systems. With early adoption and a loyal customer base, the mobile payment app is the most popular of its kind, outperforming Google Pay and Apple Pay. In the US alone, an estimated 25.6 million people are expected to pay in 2019 with their Starbucks app and accompanying card. Starbucks had a 40 percent market share in the entire payments app market in 2018.
More infographics can be found on Statista
. 2016 figures show that over $ 1 billion has been loaded into Starbucks' mobile payment system, resulting in larger dollar reserves than some major financial institutions. If customers are already used to storing their funds for easy use in a digital system, this behavior could easily facilitate the demand for BTC, especially as awareness grows.
A disadvantage for Starbucks customers could be the status of Bitcoin's asset and its constant price volatility. A cryptanalyst recently pointed out that BTC price volatility could cause users to make marginal profits each time they buy Starbucks, which would then have to be considered individually when filing a tax return.
Read More: Starbucks Crypto Adoption Will Become a Nightmare for Taxes, CoinCenter analyst says
What will happen to the Bitcoin network?
Scalability Has Been a Key Discussion Point in The Crypto community has been a well-known network for years, and Bitcoin is more affected than others both as a leading network and as the oldest network of increasing traffic. The SegWit technology and the Lightning network have done a great deal to solve the problem, but not all are convinced that Blockchain can continue to handle transactions efficiently.
Read more: 5 unexpected uses for the Bitcoin Lightning Network
Recent data suggest that around 12 percent of Starbucks payments in the US are made through the App and Card System. This is the only place where BTC payments are initially available. If we assume that the Bakkt partnership is very popular and a significant portion of these e-payment customers are investing in Bitcoin and converting it to USD whenever they want to buy a coffee, this could seriously affect the functioning of Bitcoin.
Regular Using Bitcoin in Starbucks could cause the BTC network to handle more than twice the number of transactions it is currently processing in one day. This could result in over 20-minute transaction confirmation times, bringing us to levels not seen since the 2017 bullfight.
(Daily Bitcoin Transactions)
Ideally Starbucks' new BTC integration will use the Lightning network to keep these payments out of the chain. It is unlikely that Bakkt or Starbucks customers are prepared to pay the high transaction fees required to gain more mining power for the network and to complete the transactions in a timely manner.
– Mike Dudas (@mdudas) March 4, 2019
However, Starbucks received substantial equity from Bakkt in the partnership. Was this a compromise for contributing to the health of the Bitcoin infrastructure? It may be that the company has just viewed this deal as an important marketing opportunity (not to mention tax avoidance regulations). This could seriously overload the BTC network.
Read more: The compromises between Bakkt and Starbucks: "disproportionate" number of free shares; CEO of Bakkt Gives Insight into the Starbucks Partnership and Delays in BTC Futures
However, many people in the crypto community will see potentially slow transaction times as a necessary sacrifice. One of the world's leading retailers will promote Bitcoin to millions of new people, and if the integration is successful, it will be a sign of acceptance by other major retailers worldwide.
Read More: Dotcom Comparison Bitcoin grew by 30000%, which is $ 600,000 per BTC. 5 ways that Loyalty and Bakkt can change the cryptocurrency in 2019
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