Mass Adoption of Bitcoin: What Prevents it from Happening?
Bitcoin is 10 years old and still, we can’t say that this technology had achieved mass adoption although nowadays 10 years is usually more than enough for other technologies. There are many reasons for this state of things, we can’t deny that Bitcoin is a special thing and it would probably need more time to become adopted globally. Let’s name the key problems that should be solved in order to make Bitcoin (or other cryptocurrencies) a usual part of our lives.
This problem is now less prominent than in 2017 but still, it’s not an easy decision for a merchant to sell something for BTC knowing that the next day the price of this currency can drop 20% (actually we can expect that the price will go up later, but still). As long as cryptocurrencies are massively used as a speculative asset the price will continue fluctuating. Many merchants don’t even know how to process the Bitcoin transactions considering the volatility of Bitcoin. Happily, this problem is already solved and there are numerous companies offering their assistance in the processing of the Bitcoin transactions. You can read about them here.
Some people are still trying to play the criminal card when they talk about Bitcoin negatively. They remind about the numerous cases of scamming and hacking plus they say associate the use of anonymous cryptocurrencies with the trade of illicit items (the most notorious example is Silk Road that paved the way for the wider use of Bitcoin as a payment on the black market).
This reputation is dragging behind Bitcoin and fellow cryptocurrencies despite the fact that a huge percentage of modern cryptocurrency transactions has nothing to do with criminal activity, and, BTW, don’t forget that black market existed long before the invention of cryptocurrencies. Fiat money was used for a criminal purpose for centuries.
THE LACK OF REGULATION
Some governments are very supportive when it comes to adoption of cryptocurrencies. The most vivid examples are Malta that is going to become a blockchain island and the Netherlands that already has so-called Bitcoin City.Estonia is working on blockchain-based solutions for voting and healthcare. Some Scandinavian countries are rather neutral towards the cryptocurrencies. They don’t announce any prominent cryptocurrency-friendly projects, but in fact, they contribute to the development and adoption of the blockchain projects and cryptocurrencies. On the other hand, China and some other governments are quite restrictive towards the cryptocurrencies. Of course, the restrictions make it hard for local residents and developers to deal with Bitcoin and blockchain-based projects in general.
The usability gradually becomes a less serious problem as many people work hard to make it easier to use Bitcoin for transactions or trading. Nevertheless, the necessity of dealing with the long private and public keys, the lack of trust and knowledge about the trusted platforms still prevents Bitcoin from mass adoption.
Cryptocurrencies are still far from performing as good as Visa network. Ethereum and Bitcoin execute dozens of times fewer transactions per second than the conventional banking systems making cryptocurrencies unattractive as a payment.
The solutions are discussed for a long time. The Lightning Network is an innovation that is aimed to make Bitcoin as fast as Visa but it wasn’t implemented yet. Will it work? The time will show. The other hypothetical solutions exist, too (so-called sharding for Ethereum, and so on).
This issue has at least two sides. If we eye Bitcoin as a way to replace the conventional finance system, we should admit that this technology is less harmful towards nature than the “modern” banks because operations involving fiat money consume three times more energy than notorious Bitcoin’s proof-of-work algorithm. With such attitude, we can’t accuse Bitcoin, but rather we should demand the replacement of the banking system. On the other hand, we should face the reality: the conventional banking system is not going to leave, and it has a lot of followers. Not many people trust and understand cryptocurrencies. As long as both Bitcoin and banks co-exist we have to agree that the Bitcoin network significantly damages the ecological situation.