You may have heard that Bitcoin is heading to the moon and its price will rise astronomically. Or you may have heard that Bitcoin is going to become the global reserve currency replacing the US dollar. If not, then maybe it could become the native currency of the internet?
Before this can happen though, cryptocurrency would have to become mainstream, and currently there are a few barriers that it needs to overcome. Here are five barriers to cryptocurrency adoption in the mainstream.
Scams
The first issue is with trust. Whilst Bitcoin aims to create a sense of trust by using blockchain technology to remove the need for a central authority, there is still little appetite from the mainstream to trust cryptocurrencies as a whole. This is in large part due to both the volatility of price within cryptocurrencies and the abundance of scams within the space.
As regulation has been slow to catch up with the cryptocurrency space, many people have jumped on this opportunity. There are numerous MLM coins that provide little to no value, with OneCoin and Bitconnect being perhaps the most famous. There are also numerous other coins that although perhaps not outright scams, have provided little value if any at all.
Whilst many people may have made money off these altcoins, just as many people will have lost money. This will have certainly put many people off cryptocurrencies as a whole and made them believe the space is just a scam.
User experience
If you ever think that the internet can be a confusing space, then cryptocurrencies are most certainly a step above. Whilst this might not be such an issue for those of us who have grown up around computers, for those that didn’t, the technology can still prove to be a difficult hurdle. Cryptocurrencies are even more complex. From private keys to public keys, hot wallets to cold wallets, there is a wealth of knowledge one needs to acquire before they can feel comfortable trading and playing with cryptocurrencies.
Whilst the internet is also complicated, there have been massive advances in hiding these complex processes in the back-end, ensuring a smooth and easy user experience. Cryptocurrencies, both exchanges and wallets, still have some way to go in achieving this ease of use and simplicity. This is highlighted further with the kerfuffle of working a Lightning Wallet. However, in fairness, the Lightning Wallet is still in its early days, so it has plenty of time to overcome these hurdles. Until the rest of the industry tackles these issues though, mainstream adoption will be far away.
Scaling
For those who were present during the 2017 bull run, you may have noticed the rise in fees to trade with Bitcoin. This led to a war within the community and ultimately the split of Bitcoin and Bitcoin Cash. Issues became apparent as it was clear that Bitcoin was not scaled to handle the large amount of users trying to move Bitcoin. The mempool became full, which meant that transaction fees shot through the roof.
The different approaches taken by the two competing versions are the Lightning Network, a second-layer solution built on top of Bitcoin, and the on-chain scaling solution proposed by Bitcoin Cash, where they increased the block size. Bitcoin and cryptocurrencies as a whole will need to fix the issue of scaling to meet demand if they are ever to become mainstream.
The philosophy
Bitcoiners, at least the maximalists, tend to be a rather stubborn bunch. They stick to their guns and are not impressed by the boogeyman known as socialism. Theirs is a right-wing libertarian philosophy of sound money, minimal state, and no tax. This stems from the Austrian school of economics coupled with the ideas of crypto anarchy from the Cypherpunks.
Libertarianism’s main breeding ground is within the USA, whereby thanks to the era of McCarthyism, any political or economic philosophy slightly left-leaning is automatically labelled socialism. Unfortunately for them, social democracy has strong support in many other areas of the world, from Europe to South America and Oceania.
The privitisation of all public services isn’t going to quite fly with the majority of citizens from these nations, and although there has been a distinct shift to the right in some, there has also been an uprising of the left as well.
Merchants
The final barrier to cryptocurrency adoption in the mainstream is the lack of merchants accepting cryptocurrencies as a form of payment. Without such, spending cryptocurrencies on a regular basis is difficult. This problem is exacerbated when many holders of cryptocurrencies prefer to store them for a long time in the hope of price appreciation rather then choosing to spend them.
Some major merchants have turned away from cryptocurrency in the past couple of years, which has been detrimental. Steam, the video game distribution platform, did accept Bitcoin until 2017. Again, one of the main issues for merchants is the volatility in price coupled with the scaling issues that surround some of the major cryptocurrencies.
Conclusion
There are still many barriers to cryptocurrency adoption in the mainstream. These are but five issues that are more prevalent than others, but you perhaps have some of your own. If so, let us know in the comments what you believe are the main issues surrounding mainstream adoption of cryptocurrencies.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.