Bitcoin for Payments
Bitcoin is a cryptocurrency with a current market cap of ~$524B. It is gaining popularity as a 'store of value' and investors buy and hold Bitcoin to hedge against inflation.
It is also a currency and can be used to pay for purchases. There are merchants both online and offline, around the world, who accept Bitcoin for purchases.
Another use of Bitcoin as a currency is employees choosing to get paid in Bitcoin in place of #fiat .
When Bitcoin is used for payments, the buyer makes a payment from their wallet and the seller receives the payment in the form of Bitcoin into their wallet.
El Salvador and Central African Republic have declared Bitcoin as legal tender, which means that the cryptocurrency will be accepted for payment by all the businesses in the country.
So, what does Bitcoin as a payment protocol mean ?
Blockchain can be used to transfer money, by default its native cryptocurrency, across the world.
The Bitcoin blockchain can be used a settlement layer to transfer funds.
A 'payment or settlement layer' built on top of the Bitcoin blockchain can be used to settle multi currency fund transfers. In this case the Bitcoin blockchain is used as an internet payment protocol.
1. Funds can be sent in fiat and received in a different fiat currency.
2. Transfers are immediate and transaction costs are near zero
3. Very large amounts can be transferred In summary, 'Bitcoin for payments' and 'Bitcoin L2 as an internet payment protocol' are different use cases in the Bitcoin ecosystem.