Bitcoin has always been the basis of a utopian cashless society. The current crisis facing the world is forcing people to shop from homes and although it is related to a more dystopian disease spreading around the world, the cryptocurrency is increasingly in demand because of the setup. More and more people are now using the cryptocurrency for home-based e-shopping as more and more countries are quarantining parts of their populations around the world to help fight against the spread of the Covid-19 virus outbreak. People also are being advised to stay at home and only leave in moments of necessity only which is increasing the demand for e-commerce and home-based solutions around the world.
This effect from the recent situation can be seen quite clearly. E-commerce has historically relied on the lightning network payments approach to hasten transfers around the crypto space. Lightning networks are especially facing increasing demand and in many instances they are actually struggling to catch up with it. Strike by Zap, a lightning based payment solution currently in beta stage nearly crashed earlier as they service provider’s demands increased beyond expectation recently.
Jack Mallers, the CEO of Zap said:
“[the wallet] crushed its all-time-highs last week…., IT’S A RALLY ALL OVER, FROM LATIN AMERICA TO SOUTH KOREA…., We were not prepared to do this much volume. I had to make emergency phone calls to our trading counterparties to make sure the app wouldn’t crash”
Strike like other Bitcoin payment companies allow merchants to deal in the cryptocurrency without actually being on the receiving end of owning it. They make extensive use of the Lightning Network and its capabilities to help power this progress. It’s basically short-liquidation of Bitcoin and Strike and other similar outlets have developed their own algorithms for this purpose. But, the algorithms hadn’t been scaled yet and suddenly this massive demand swept the market and put pressure on their business models.
Fold, another crypto payment company has reported considerable increase in activity since the end of February itself particularly related to safety equipment including gloves, masks and other items.
Will Reaves, the CEO of Fold said:
“Most of the activity has been focused on prepping,”some users have mentioned that the contactless nature of Fold payments versus contaminated physical cash and credit cards has made them feel safer for the first time.”
But, the latest drop in Bitcoin prices is affecting the utility of cryptocurrencies because HODLers don’t want to liquidate their Bitcoin now and other people are unsure about its long-term viability in the face of the restrictions and economic constrictions being caused by the Covid-19 virus. The recent stabilization of prices between $5000 and $5500 has once again helped the sector. However, crypto promoters and adopters believe that in the long-term if the Coronavirus situation gets dragged on, Bitcoin will eventually benefit a lot from the social distancing and growth in e-commerce especially ever since the dependability and integrity of the US Dollar has taken a hit when the Federal Reserve recently injected $1.5 Trillion worth of new currency into regulation and considerable slashed the interest rates.
