Many individuals actively involved with Bitcoin may question why the innovative cryptocurrency is still yet to make a significant impact on mainstream finance, despite everything it has to offer. To many of us, the benefits offered by Bitcoin should lead to significant mainstream adoption, but what is taking so long?
Familiarity & technicality
Bitcoin is fast becoming more accessible, but it is worth remembering the technical nature of the cryptocurrency and how this may put off a large number of possible users. The learning curve for new Bitcoin users can be steep; it can take time to understand the cryptocurrency which has very little in common with existing fiat money. More recently we are beginning to see services which bring together fiat and Bitcoin wallets, to provide the benefits of Bitcoin transfers with the familiarity of fiat money. This will be very important for adoption moving forward; Bitcoin is unlikely to replace the existing currency paradigm, but certainly stands to improve certain areas of finance and payments processing. The introduction of Bitcoin debit cards, as a result of the improving relationships between banks and Bitcoin, will likely push adoption further, as more individuals could likely benefit from being able to use the cryptocurrency in this fashion.
The nature of the cryptocurrencies as an emerging technology, means that most individuals who wish to experiment with Bitcoin must first purchase it with fiat money via an exchange. This process makes the cryptocurrency feel novel and like a purchased asset, rather than a currency like GBP or EUR. In order for Bitcoin to grow further, it will be essential that more and more people get paid in the cryptocurrency. There are already a growing number of talented freelancers who accept payment in Bitcoin and as more people are paid in the cryptocurrency, they are more likely to look to spend it in a variety of settings. If a large enough population is paid in Bitcoin, there is a greater incentive for merchants to accept the cryptocurrency. Many people will need a reason to become actively involved in Bitcoin; some merchants now offer reduced costs to those who choose to make purchases with Bitcoin, to reflect the lower costs on the merchant in comparison to existing payment processors. Companies can lose notable profits to payment processors such as Paypal and Stripe, and are able to pass savings to customers when Bitcoin is used.
Ultimately, adoption is never going to be an overnight process, as Bitcoin offers a significant departure from the bank issued currency that has dominated for centuries. However, the benefits offered by the cryptocurrency are substantial; even the banks themselves are actively investigating the capabilities of blockchain technology and beginning to take a more favourable approach to working with the alternative currency. Earlier,which is likely lead to Bitcoin facilities being offered to Barclays customers at some point in 2016. Greater adoption is happening, momentum is building and it will be incredibly exciting to watch development in the Bitcoin sector over the next year or so!