It is hard to find anyone who hasn’t heard of Bitcoin in one form or another. Whether through the media, family, friends, or ads, Bitcoin has become a global phenomena. It has the endorsement of celebrities, prominent CEOs, YouTube podcasters, and current and former world leaders. However, despite becoming a well known brand around the world, no one is using it, why? Besides the scalability, security, and price manipulation issues, there are many other factors affecting mass adoption. It is expensive to buy, people rather hold it than transact with it, the commercial support infrastructure is non-existent, and its price volatility makes it unusable. These factors combine to hold back mainstream adoption and acceptance.
At $6,328 (at time of writing), Bitcoin is not an affordable medium of exchange. Buying a single coin is often outside of most people’s budget and is therefore useless as a legal tender. Unless Bitcoin reaches parity with the dollar or Euro, there won’t have much case use for it other than being a monetary talisman or a rare and valuable digital artifact. This is a huge drawback as it makes it impossible for common people to acquire and much less transact with it.
Most market analysis indicate that Bitcoin will rise in value in the coming months. The securitization of Bitcoin is building up a bull market of unforseen magnitude. Some predictions estimate its price to reach North of $50,000 in a year and even a million dollars within a decade. Understandably, people is choosing to hold on to it rather than use it to buy the proverbial cup of coffee. However, unless Bitcoin is put to use, it will never achieve its purpose.
Currently, it is very difficult to transact using Bitcoin. The support infrastructure just isn’t there yet. PundiX, Square, PumaPay and others are hard at work filling the demand for merchants to accept crypto currencies as payments. But the programmable integration of crypto into existing payment systems is costly and developers fees are high. Nevertheless, efforts to get the World Wide Web Consortium (W3C) to include APIs into its code to accept online crypto payments is bearing fruit.
The last immediate barrier to mainstream adoption is price volatility. Merchants are unwilling to take crypto as payment when prices are unpredictable. They will not risk losing money if crypto depreciates minutes after finalising a sale. In this, stablecoins can offer a solution; in the near future, customers and merchants will have a variety of bank issued stablecoins to choose from. Some will even offer the convenience of converting the value of the transaction back to Bitcoin through atomic swaps.
Work continues on overcoming the major technical obstacles preventing the adoption of Bitcoin. The Lighting and Liquid Network are making micro-transactions possible and bringing scalability one step closer to reality. Emerging crypto exchanges and custodians will add liquidity and mitigate price manipulation and volatility. And increased usage will attract large developers into the point-of-sale market.
However, unless the four points aforementioned are addressed, Bitcoin will not gain adoption. In order for Bitcoin to become a global currency it must be seen and used as money and not as anything else.