the future of crypto payments
The usual approach to justifying crypto payments today is that they offer a cheap and fast alternative to current payment rails. We often see experiments using stablecoins like USDC to buy ‘real world’ items—like that example of using USDC on Base to buy a cup of coffee. There’s a case to be made that this is a better form of payment, but the incremental benefits of using USDC aren’t exactly the 10x improvement we need to get blockchain rails widely adopted.
Why? Because, alongside those benefits, we’re missing the other parts of the stack that traditional payment systems already have, like connecting to inventory systems, reconciliation, order systems, etc. The traditional rails had decades of iterating and improving these systems for business, and just being cheaper isn’t going to cut it. Alongside the great benefits we also get so many missing components that it usually zeros out the benefit, which is something arguably not even a net positive for businesses.
This naturally leads to the question: What’s the actual 10x advantage of crypto payments?
I believe the answer lies in the interoperability and permissionlessness of crypto rails. With crypto, you can do things that traditional payments simply can’t, like connecting the payment experience to other onchain systems automatically. For example:
- Automatically routing payments through Uniswap so you can pay with any coin.
- Connecting to onchain reputation and points systems like Stack.
- Integrating with cashback and incentivization systems like Boost.xyz.
As more and more protocols are being built natively onchain, we can enrich the payment experience and create new types of ‘programmable experiences’ that simply don’t exist today.
So this isn’t just about making transactions cheaper—something traditional rails could arguably achieve by lowering costs. It’s about creating a new type of payment experience, one that’s interconnected with other onchain systems.
Just using crypto for peer-to-peer payments barely scratches the surface of what blockchain payment systems can do. In fact, it’s just the tip of the iceberg. People tend to compare new systems to old ones, which explains the obsession with lowering costs compared to X/Y/Z, but once you start thinking about the new possibilities, you discover a whole new world.
Crypto payments should focus on creating interconnected experiences and enriching payments, rather than competing on features with traditional payment rails.
