Crypto offers a promising solution by enabling seamless global payments for everyone. According to ReportLinker, the global payment market is projected to reach $1.29 trillion by 2026, showcasing its growing demand.
Although this figure demonstrates the increasing need for global payment, it’s important to acknowledge that certain regions are still underserved, encountering exorbitant fees for international transactions.
On-chain payments, leveraging blockchain technology, are considered a potential solution to improve this situation. However, it is worth considering the distance we still have to go before achieving the desired outcome of truly seamless global payments.
In a captivating presentation at the Permissionless Web3, Andy Bromberg, CEO of Eco App & Beam, spoke on what he believes is the impending “Golden Age” of on-chain payments.
He revisited the roots of cryptocurrency’s technological revolution, traced its evolution, and highlighted the pivotal role of account abstraction in this exciting era.
He started by recalling the Bitcoin white paper, which emerged more than a decade ago, and how Satoshi Nakamoto’s vision was clear: to create a peer-to-peer electronic cash system, decentralizing payments and eliminating intermediaries. This vision of seamless, decentralized payments has been at the heart of the crypto industry.
The evolution of payment in crypto
Describing the evolution of payment in the space, he mentioned how first, Bitcoin itself introduced the concept of direct peer-to-peer payments. Ethereum and smart contract platforms expanded the ecosystem’s capabilities, paving the way for more sophisticated financial services.
Subsequently, stablecoins made their mark by offering users a desired asset for transactions free from market volatility, an essential component for on-chain payments. The progress of DeFi (Decentralized Finance) further propelled the growth of the blockchain ecosystem.
He argued that despite years of development and innovation, the realization of this vision has remained elusive. The CEO noted that most cryptocurrency payments still occur on centralized platforms, a far cry from Satoshi’s original vision.
For those done on DeFi platforms, high transaction costs and slow processing times remain a significant challenge to be overcome.
Introductions of Layer 1s
He went further to state how the recent emergence of Layer 1 (L1) and Layer 2 (L2) solutions like roll-ups, which has significantly reduced transaction costs generally and improved speed, has made on-chain payments more practical.
During this development, he identified four main roadblocks. The first is complex taxation, where the unclear tax treatment of cryptocurrency in different jurisdictions creates friction for on-chain payments.
Additionally, disputes and irreversibility make transaction reversals nearly impossible.
The other two roadblocks involve the cumbersome process of moving funds between traditional financial systems and crypto platforms, which needs improvement.
Furthermore, implementing privacy while conducting on-chain payments remains a challenge due to the transparency and pseudonymity of transactions.
The solution – Account abstraction
The speaker then spoke about what he considers a game-changing development: account abstraction. This protocol improvement allows wallets to run smart contract code, opening up a world of possibilities.
It simplifies fees, enables payments in the token being sent, abstracts away blockchain complexities, and improves user experiences.
To illustrate the potential of these advancements, he introduced Beam, a product designed to simplify on-chain payments.
He said that Beam offers a user-friendly, non-custodial wallet that allows users to send money instantly and at a low cost, all thanks to account abstraction. It can be as straightforward as sending a link, scanning a QR code, or using usernames.
In closing, he added that builders should consider how to implement account abstraction to make payment better in the crypto world and to seek more innovation that will make the Satoshi dream a reality.
