Korean stablecoin, Terra saw a massive spike in volume yesterday, up 280% on the previous day. And, as a cryptocurrency that sells itself as a payment system, this may well hint at the burgeoning acceptance of crypto as money.
Winter is here and ecommerce volumes are through the roof. @terra_money saw 11 BILLION KRT (korean won pegged stablecoin), roughly valued at 10M USD yesterday. 17.4% annualized staking return from tx fees as a result! pic.twitter.com/19jgJRroQI
— Do Kwon 🌕 (@stablekwon) December 23, 2019
Terra Takes On The Problem Of Crypto As Payment
For the most part, cryptocurrencies as payment have failed to capture the interest of the general public for a variety of reasons. Most notably, in relation to volatility. And perhaps to a lesser extent, due to the negative network effect of people being comfortable with what already is.
And while the benefits of using cryptocurrency as money are apparent, without people embracing this, low adoption, due to comfort and familiarity with the status quo, becomes a self-fulfilling prophecy.
Nonetheless, stablecoin offering Terra is looking to change that. The project recognizes the intricate relationship between adoption and positive network effects. Which it hopes to address by way of a price-stable and growth-driven cryptocurrency offering. But more than that, it differentiates itself by having a clear roadmap plan for mass adoption.
“Since the value of a currency as a medium of exchange is mainly driven by its network effects, a successful new digital currency needs to maximize adoption in order to become useful.“
Indeed, the people behind this project see Terra winning hearts by offering a fairer deal for all. This includes lower fees and stable mining incentives, and not at the expense of low merchant acceptance.
Cryptocurrency As Money
Terra is a relatively new offering in the cryptocurrency space, having released its whitepaper in April of this year.
However, the team has made great strides in pushing the narrative of crypto as a useable form of money. Just a few weeks ago they announced a tie-up with CU, Korea’s largest convenience store chain, with 13,500 locations.
In response to this, Terra co-founder, Do Kwan highlighted one of the main challenges for onboarding merchants. Namely that low margin businesses, like convenience stores, are put off accepting cryptocurrencies as payment due to volatility.
However, Terra’s deal offers CU a fixed and secure payment system. And CU stores will roll out cryptocurrency payment, via Terra’s Chai app, by the end of the year.
The Future Of Money
The trend towards a cashless society is already in full swing. And cryptocurrency payment systems are simply a natural extension to this.
Indeed, technology writer, Tim Ventura believes cryptocurrencies are the final stage of the virtualization of money. Which he sees as inevitable as the world moves towards egalitarianism.
“Cryptocurrency is like an iceberg. Above the surface you see a flurry of news stories, day-trading speculators, and even corporate interest. Below the surface, however, there’s a massive community of people who are just plain fed up with the status quo, and looking for a better way. For them, crypto was the solution — and for many it still is.”
However, with numerous offerings in the mix, both private and government-backed, it then becomes a question of which cryptocurrencies will win out as the one that everybody uses.
While Bitcoin might have crossed your mind, founder of Worthyt, Kenny Li points out the flaws in Bitcoin as a payment system, including poor scaling and excessive energy consumption.
“It also set the stage for what a decentralized currency should look like, and proved that the concept can, in fact, work. Within a decade, it became a global experiment… That being said, Bitcoin may not be the answer.”
And taking all of this into consideration, Terra is poised to out crypto Bitcoin, as a payment system at least.
The question is, can Terra keep onboarding merchants, and will this trend continue outside of Korea?