TL;DR: According to a new regional report, bitcoin cash dominates all other major cryptocurrencies when it comes to retail usage and merchant adoption in Australia, accounting “for 92.45% ($36,431) of all cryptocurrency spent and 80.3% (502 tx) of all cryptocurrency transactions” Down Under.
Bitcoin Cash Dominates Australia
“This monthly report sheds some light on the relative scale of these approaches as revealed by hard merchant data,” begins the Australian Cryptocurrency Expenditure at Retail Businesses – September 2019 by BitcoinBCH.com CEO Hayden Otto. It sources data from two cryptocurrency-oriented merchant services, TravelbyBit and HULA. Both are chartered to help address price volatility concerns chief among businesses looking to experiment with crypto.
TravelbyBit (TBB), described in the study as “a dominant payment processor operating in Australia,” had an enormous headstart over HULA. TBB’s “multi-coin point-of-sale system” has been on the ground for more than two years, evolving to offer nearly 200 merchants access to “Bitcoin Core (BTC), Lightning Network (LN), Binance Coin (BNB), and Litecoin (LTC)” along with limited exposure to Bitcoin Cash (BCH). “TBB is most known for launching the world’s first cryptocurrency airport in Brisbane and for helping set up the town of 1770 with cryptocurrency payments with the help of Queensland government grants a $3.5 million investment from Binance,” the report revealed.
HULA (Hockings Underwriting Logistics App) by contrast has been operating in Australia for two months. The BitcoinBCH.com-endorsed product is “an automated underwriting system,” servicing slightly more than a dozen businesses proper. “Underwriting has become popular in Australia for performing back-end direct conversions as it is more decentralised than payment processors and keeps coins circulating in the community longer with dramatic results,” the report claims.
Underwriting Down Under
A regular problem in studying the impact of cryptocurrencies like BCH on the retail economy in the country has everything to do with a kind of happy problem, “a decentralised conglomeration of merchant agreements and relationships.” The report, however, was able to pull-together data from sources like TBB, HULA, and the Marco Coin directory, eventually finding BCH to be “the only cryptocurrency that has seen significant adoption in a purely peer-to-peer fashion.”
The report is keen to emphasize underwriting as “an innovation that grew out of [BCH] merchant adoption and is a broad term for agreements between a [BCH] investor and one or more merchants. With underwriting, the merchant enjoys a ready buyer of [bitcoin cash] willing to buy at the exchange rate at the time of sale, thus commuting each BCH sale into a cash sale and saving several percent in [Electronic Funds Transfer at Point Of Sale] bank fees.” Investors (underwriters) are saved the hassles and frictions cryptocurrency exchanges can bring. “Further, the underwriter is likely a member of the local community whose actions help keep the coins circulating rather than instantly being repatriated,” the report stresses.
What is most striking about the figures collected is just how much bitcoin cash dominates when put up against other, better funded and marketed cryptocurrencies: “92.45% ($36,431) of the total cryptocurrency retail spend in September. The [remaining] balance is a small group comprising LN 3.1% ($1,225), BNB 2.3% ($913), BTC 1.9% ($745) with a barely visible LTC 0.19% ($74.5), BSV 0.03% ($13.5) and ETH 0.01% ($3.5),” the report cites of Australian users for the month of September. The dominance continues along those lines in the total number of transactions (see graph above).
TravelbyBit Versus HULA
The report also looks at back-end systems during September, putting the well-established TBB directly against the new kid on the block, HULA. Again, TBB offered a basket of cryptocurrencies, and is rewarded by sponsors rather than flesh and blood customers for doing so, whereas HULA laser-focused on offering Bitcoin Cash. Conventional wisdom might suggestion TBB had the obvious winning business model, but it turns out HULA might be onto something.
Last month, for example, “91% of Australia’s retail cryptocurrency economic activity occurred with HULA on the [Bitcoin Cash] blockchain which processed $35,667 out of September’s total $39,405,” the report detailed. HULA’s model might be succeeding due to the old-fashioned notion, ease-of-use. TBB’s approach, the report notes, is “more complex, [requires] additional steps, [supporting] cryptocurrencies not suitable for retail use, and are compounded by poor staff training.”
For HULA, the Bitcoin Cash network is prized for its speed and low-cost transactions. That singular support means an ultimately simpler system which “[requires] fewer steps, less staff training and more modest support.” Indeed, the report’s findings show HULA took 76% of all cryptocurrency transactions in September. And even with TBB “only enabling [Bitcoin Cash] on a minority of their Point of Sale systems, [BCH] was still the 3rd most spent and 2nd most transacted among their supported cryptocurrencies,” the report documented.
The report is also careful to address blips and spikes in recent activity due to outliers like the Bitcoin Cash City Conference, and it will be interesting to see if BCH and HULA can continue their momentum. Ultimately, the Australian Cryptocurrency Expenditure at Retail Businesses – September 2019 is the first glimpse into metrics from a First World country experimenting with live crypto ammunition in the wild. For those concerned with delivering peer-to-peer digital cash by way of lower fees, lighting quick confirmations, and censorship resistance, there is much to chew on and consider.
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DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.