Payments Revolution Won't Happen on Slow Blockchains

A type of digital money called a stablecoin could change the way the world pays for things. Stablecoins are digital dollars that travel across the internet almost instantly and at very low cost. Experts say they could do much more than replace credit cards — they might let machines pay other machines on their own, all day long, without any human involved.

Right now, businesses pay a lot just to accept credit cards. Card fees often take about 3 percent of every sale. For many store owners, that is the second-biggest cost they have, right after paying their workers. If businesses switched even some payments to stablecoins, they could save a lot of money and keep more of what they earn.

Credit card payments also take days to fully clear, meaning businesses have to wait before they can use that money. With stablecoins, money arrives right away. That helps restaurants, stores, and other businesses manage their cash without having to borrow from banks. Getting paid faster makes running a business much easier.

But the biggest change may not involve people at all. Experts say stablecoins could allow machines to pay each other automatically, in tiny amounts, as services happen. Think of it like a meter running in the background, making payments every few seconds without anyone pressing a button. This is called machine-to-machine payment.

Here are some examples of what that could look like. An electric car could pay by the minute for a parking spot or a charging station. A solar panel on a roof could automatically sell extra power to a neighbor. A delivery drone could pay for the right to fly through certain airspace as it crosses a city.

None of these payments are large, but together they could add up to trillions of transactions every single day. As more devices connect to the internet, the number of automated payments will keep growing. Experts say machines could soon make far more payments each day than all the people on Earth combined.

This kind of machine-to-machine payment could shake up many industries. In energy, homes with batteries or solar panels could buy and sell electricity in real time instead of waiting for a monthly bill. In tech, computer servers could pay each other for processing power only when they actually need it. In media, you might pay just a few cents to read one article or watch one short video, and the payment would happen automatically.

Stores and warehouses could also be transformed by this technology. Smart shelves could notice when a product is running low and automatically reorder it, paying the supplier right away. Even insurance could change — a car might pay for coverage by the mile, only when it is actually being driven. These changes would make many businesses run more smoothly and cheaply.

Traditional banks and credit card companies would feel the most pressure from these changes. Those systems were built for a world where humans approve payments and transactions happen one at a time. A world with trillions of tiny automated payments every day is very different, and banks will need to adapt fast. Companies that cannot keep up may lose a lot of business.

For all of this to work, the technology behind these payments has to be extremely reliable and fast. Machines making real-time decisions cannot afford to wait for a slow network. If a payment system gets jammed during busy periods, entire networks of devices could stop working. Many of today's blockchains struggle with exactly this problem — they slow down and get more expensive when too many people use them at once.

Annabelle Huang, the co-founder and CEO of a blockchain company called Altius Labs, says speed and low cost must be the top goals for anyone building payment blockchains. She believes the winners in this space will not be the ones with the most complicated systems. They will be the ones with the fastest and most dependable networks. Slow blockchains, she says, simply will not make the cut.