As an Indian Bitcoiner, when I returned home recently, I found myself repeatedly using UPI digital payments for everyday expenses.
UPI (Unified Payments Interface). Indias real-time bank-to-bank payment system that has become ubiquitous for making payments by scanning QR codes or using phone numbers. It has even enabled street vendors and small shops to accept online payments.
Given the difficulty in obtaining cash and the merchants having to maintain the ticket machines, UPI is often the only payment option.
And I have to admit; it is incredibly fast, cheap and easy to pay sellers via UPI apps, compared to fiddling around Bitcoin lightning portfolios, whether or not custodial. The money is immediately moved for free and the process is known to all parties.
While I’m very busy with it censorship resistantprivate and decentralized money, the convenience of Bitcoin and UPI is hard to ignore. UPI processes more than 14 billion monthly transactions at more than 450 banks without fees.
By comparison, Lightning suffers from low liquidity, channel balancing issues, and clunky user experiences (which continue to improve with custodial wallets, with some tradeoffs).
Of course, the privacy implications of an almost entirely digital system controlled by centralized third parties make me cringe and sound dystopian. But most Indians are happy to give up their privacy for their convenience time and again.
So even as a Bitcoiner, I don’t see most Indians abandoning UPI anytime soon to adopt Bitcoin Lightning en masse for everyday payments, Bitcoin’s circular economies aside. The incentive must be there. And let’s be honest: Lightning still confuses Bitcoiners, let alone my uncle!
Perhaps concerns about privacy or currency devaluation could push Indians toward Bitcoin payments. But for now, UPI has too much momentum and network effect.