Visa Crash Highlights Need for Decentralized Bitcoin-Like Payment Systems

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Visa Crash Highlights Need for Decentralized Bitcoin-Like Payment Systems

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Visa experienced a serious network disruption on 1 June 2018, impacting customers across the entire European Union and Ireland. This failure is the result of Visa being a centralized network and highlights the need for decentralized payment systems like Bitcoin and cryptocurrency in general.

In an official statement regarding the incident, Visa said the outage occurred due to a hardware failure, and that the company fell short of its goal of Visa cards working reliably 24 hours a day 365 days a year. According to The Irish Times, there was a major disruption to businesses throughout Ireland as people suddenly found themselves not able to pay bar tabs and restaurant bills. Panic lines formed at ATMs as people tried to withdraw as much cash as possible.

Visa is the world’s 2nd largest payment processor behind China’s UnionPay and processes in the order of 100 billion transactions per year, worth several trillion USD. A large fraction of the world uses Visa for their payment needs, and it is therefore very important for the economy to have Visa reliable 24/7, and not have any outages like the one that just occurred.

The problem with Visa is that it is centralized, payments occur through and are dependent on infrastructure which Visa maintains and controls. A hardware failure is what caused this European outage, and it is possible that more outages could occur due to hardware or software failures in the future.

Bitcoin, on the other hand, is decentralized. It exists on every computer that runs the Bitcoin Core program. Currently there are about 10,000 Bitcoin nodes in the world, which are computers that run Bitcoin Core. In order for Bitcoin to have an outage, every single computer running Bitcoin Core in the world would have to go offline.

There is no central point of failure for Bitcoin like there is with Visa, so Bitcoin payments work 24/7. Since the genesis block of Bitcoin in 2009 the network has had 99.992% uptime, essentially no downtime at all. It’s summed up in the following tweet.

This makes it clear that Bitcoin is more reliable than Visa as far as uptime is concerned. Decentralized cryptocurrencies are what the world needs for a healthy economy since with well-maintained decentralized payment systems like Bitcoin there are never outages.

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