4 Obstacles To Bitcoin Mass Adoption
There are others, but these are clearly the 4 major obstacles.
The emergence of Bitcoin, which has now exceeded 10 years of existence, will have led to the creation of a brand new industry based on Blockchain technology that promises to radically change the way people live their daily lives. This change is still in its infancy and promises to be extraordinary.
So far, this new industry has already accomplished a lot, both in terms of the growing attention that cryptocurrencies receive and in terms of the creation of new digital assets outside the traditional financial system.
A new capital raising mechanism has also been set up with ICO (Initial Coin Offerings) as well as a new mechanism for digital financial assets with STO (Security Token Offering). Despite these major innovations, there are still a number of obstacles preventing the mass adoption of Bitcoin by the general public.
I propose that you revisit the 4 main obstacles to Bitcoin mass adoption.
1. Complexity Of Bitcoin Concepts For Beginners
Entering the world of cryptocurrencies is often described as falling into a rabbit’s den because we do not know how far this can lead. Currently, too few individuals fall into this burrow for a good reason.
The learning curve in the world of cryptocurrencies and the Blockchain is far from easy and linear.
There are many abstract and technical concepts that some people have a hard time assimilating, which tends to discourage beginners. For mass adoption by the general public to occur, it will be essential to make these complex concepts and ideas more accessible.
Fortunately, the democratization movement has already been organized with many resources available in both digital and paper versions.
However, the effort to train and educate the general public is not enough. It is also necessary to make it as easy as possible to send cryptocurrencies to another person.
Carrying out a transaction in cryptocurrencies must become an easy thing.
Overall, the average user of a payment system does not want to hear about private keys or other cryptographic concepts when carrying out transactions. On the contrary, such notions will tend to frighten them and become a brake. Private key management systems, therefore, have an important role to play in making them as transparent and simple as possible for users.
In addition to the training effort to be carried out with private individuals, it is crucial to give particular importance to business education. The integration of the Blockchain into existing business processes will be an important way to introduce the Blockchain to the general public.
Thus, organizations such as the Chamber of Digital Commerce must be recognized so that they play an important role in promoting the potential of the Blockchain and the technologies that result from it for companies.
Training is therefore the first crucial point that must be addressed in order to achieve mass adoption of cryptocurrencies.
2. Bitcoin Is Very Volatile
If the general public knows little about cryptocurrencies, there is one of its characteristics that they have already heard about at least once. This characteristic is volatility.
Not a week goes by without the media mentioning the volatility of cryptocurrencies as one of the most important dangers affecting them.
The price of Bitcoin or other cryptocurrencies can thus gain 20% in one day and easily lose 20% the next day. These upward or downward movements can even occur within a few hours.
From the traders’ point of view, this volatility is a good thing since volatility means the possibility of making big profits. However, the excessive speculation surrounding cryptocurrencies tends to mask what is really important with cryptocurrencies, namely the revolutionary side of underlying technologies such as the Blockchain.
Unfortunately, the general media seem more concerned with the price of Bitcoin or fundraising in the ICO market than with these innovative technologies. All this at the expense of the general public, who struggle to perceive what is really important with cryptocurrencies.
On the other hand, the volatility of the Bitcoin introduces a monetary risk that affects the use of Bitcoin as a medium of exchange.
As a consumer, while it is true that this volatility can boost your purchasing power, it can also significantly reduce it, and for many this share of risk is not acceptable. As a result, most of these cryptocurrencies are treated as digital speculative securities instead of being seen as means of exchange that can be used in everyday transactions.
Stablecoins, which seek to combat the excessive volatility of cryptocurrencies such as Bitcoin, may have a role to play in the future to become an important medium of digital exchange with the general public.
For mass adoption of Bitcoin or other cryptocurrencies to occur, the existing infrastructure will have to be able to absorb the number of transactions that would be carried out given the increase in the number of users on the Blockchains. We have all seen examples where non-mature infrastructures have become unable to scale up in order to properly manage the massive influx of users.
A major problem is also the significant increase in transaction fees as the number of transactions to be validated increases, as we have seen on several occasions with Bitcoin since the end of 2017.
This problem caused huge bottlenecks on the Bitcoin Blockchain at the end of 2017, for example. The Ethereum Blockchain is not immune to this problem and that is why the Ethereum 2.0 project was launched in order to switch the network to a more powerful technological platform.
Of course, these problems are known to the community, and attempts to find solutions are beginning to be proposed.
The Lightning Network could allow the Blockchain Bitcoin to move to the next level in terms of transactions that can be validated per second in the future.
It will eventually have to be seen whether the efforts undertaken by the community to improve the scalability of Bitcoin will be successful and sufficient to facilitate the increasing number of transactions in the case of mass adoption by the general public.
4. The Only Speculative Approach Of A Large Number With Bitcoin
Many community actors have a short-term approach somewhere by buying Bitcoins only for the speculative side. This strongly hinders the potential mass adoption of Bitcoin by the general public.
Indeed, by accumulating Bitcoins without the will to spend them through transactions, the price of Bitcoin rises and can only constitute a store of value.
It is to be hoped that over time this situation will change. The fact that more and more physical merchants support Bitcoin as a means of payment is something that goes in the right direction so that Bitcoin remains a real medium of exchange.
Finally, let us not forget that the construction of a new industry that disrupts the established codes requires considerable work and therefore patience.
The work done over the past 10 years and the emergence of Bitcoin is really phenomenal when you look back.
It is therefore necessary to be patient and continue the forward march of Bitcoin while remaining optimistic in its ability to win over the general public.
The potential of Bitcoin far exceeds the number of current participants who buy it. It is therefore important to keep in mind that mass adoption has not yet occurred. There are some obstacles to this adoption, as I have just explained.
They will first have to be addressed by the community so that this mass adoption can take place in the future. Whether through training the general public or the creation of tools to facilitate the use of cryptocurrencies, efforts will have to be made, but the industry is still young and patience will be required.
Nevertheless, things are going in the right direction, so I remain convinced that Bitcoin will be able to overcome these obstacles in the coming years.