If you know anything about Alibaba and WeChat at this point, then you probably also know that they have made big plays to capture their own shares of the Digital Currency market. The difference between these companies and the typical Crypto project is simply that even though they have done so, they have made sure to maintain a level of distance from the Blockchain space up to this point.
In most cases, this means calling their offerings digital payment systems as well as not using the Blockchain, at all. Even so, it does seem that a paradigm shift has been occurring, as Alipay and WeChat Pay continuously evolve and take over more of people’s lives, especially in China and Japan.
To put things into a bit of perspective, it appears that as of May 15, one report found that the primary areas in WeChat pay has been used are what are called “offline environments.” According to the same report, at the same time, the second most popular usage of WeChat pay has been for general online shopping.
In looking at both of these findings, it may easily be said that the first is far more significant, given that it shows that a digital payment system has penetrated areas of people’s lives that typically involve fiat currencies on an overwhelming level.
With Alipay, the situation appears to be essentially the same. Business Insider even goes as far as to claim that these payment systems have ended up so pervasive that cash is almost non-existent on the streets. Inside of this discussion, it is claimed that street performers even accept digital payments regularly.
In an overarching sense, anyone is a business with a simple download of an app.
From a financial perspective, the sky is the limit for such companies with Chinese mobile payments hitting $5.5 trillion, even back in 2016. In the case of the United States, at the same time, they were sitting on only a $112 billion market and the gap has only been getting wider. In short, China has found a way to do what the rest of the world does not seem to have accomplished yet by pegging digital money to real world items so that people understand the prices of needed items in terms beyond fiat currencies.
Furthermore, in China, everyone can accept payments for any service without the involvement of any middleman. With all of this under consideration, it is hard not to speculate what this growing trend will mean for the continued scaling of the Blockchain industry, over time. On a surface level, both spaces seem to be able to exist comfortably hand in hand for the time being. Upon further analysis, simply given what Cryptocurrencies are in connection with what digital currencies are, eventually something has to give.
Even though one uses the Blockchain and one does not, both are looking to replace traditional money. Because all of this is going on, one could conclude that it has never been more important to establish strong use cases for Blockchain technology beyond its central function as a decentralized ledger.
If we do not do this in time, then this year’s market slump might get even worse before it gets better. To do this right, as business schools tell their students time and time again, true customer needs should be answered by companies that are actually solving an important problem. If, on the other hand, both Alipay and WeChat Pay move into the Blockchain space before the year’s end, then the whole industry might change drastically.
By: BGN Editorial Staff