It’s been nearly nine years since the invention of Bitcoin, and despite being known only to Internet geeks during the first few years, it is now a well-established asset that is being traded on exchanges, stored in banks, and taken into consideration by many governments. But many people forget about the initial purpose of Bitcoin: being a digital currency for payments. Now the focus has somehow shifted to it being a store of value instead, and lately this store of value doesn’t perform very well, losing ¾ of its initial value from January 2018. The issue becomes very clear: real adoption is needed. Can it be used for payments like its creator, Satoshi Nakamoto, initially planned? Is it even possible in the current economic climate? There are certain steps that need to be done and various experts who have something to say about it.
The Internet needs something more advanced than fiat money
Jack Dorsey is co-founder and CEO of Twitter and founder as well as the CEO of Square, a mobile payments company.
The Internet is uncontrolled by any government. It has servers all around the world, so it’s impossible to halt it all at once. It’s supposed to be completely unobstructed, and while some governments impose restrictions, like a Great Chinese Firewall, or simply block a lot of sites (a common approach in Russia), those who want to access any particular site can find a way to do it by using proxy servers. Money, however, is an asset that is fully controlled by governments. If you don’t have a bank account or your bank accounts are frozen, you can hardly purchase anything on the Internet, because many online stores require paying with cards in advance. So it would be great to have a “native currency” that would become an integral part of the Internet.
“The Internet deserves a native currency. It will have a native currency. I don’t know if it will be Bitcoin or not. I hope it will be.”
Currently, Bitcoin fits this role the best. It’s uncontrolled by anyone, it’s global, and it can be used without restrictions from any third party. That could be the thing that the Internet needs to make native payments a reality. But there are two sides in this game, and apart from the buyers who could pay with Bitcoin there should be sellers who are ready to accept it.
When will merchants be ready to accept Bitcoin?
Wouter Vonk is the founder of Bitgild, a service for exchanging Bitcoins for gold.
Adoption among merchants is crucial for the success of Bitcoin as a payment system. It’s important that both parties, merchant and customer, would be motivated to use crypto in everyday transactions as opposed to paying with fiat. When people holding Bitcoin will get more opportunities to buy real goods then more stores will support crypto. It’s probable that they will be spending their coins and drive adoption instead of just holding onto it and waiting for the price to increase. Some brands feel that and try to use it – the new luxury watch from Hublot, Exodus (the new blockchain smartphone from HTC), and smartphones by Blackberry are all signaling a changing of the times. But in general, adoption is still far on the horizon.
“…for Bitcoin to go really mainstream we need services to make Bitcoin even more lightweight and easier to handle.
As soon as we are at a point that I do not have to explain my grandma she has to create a cold wallet and should use 2-factor authentication before she buys Bitcoin it is ready for mainstream adoption.”
In order to become generally adopted, paying with Bitcoin shouldn’t be harder than paying with a Visa or Mastercard. There should be a complex solution that would contain everything for using Bitcoin without having to think about how it works. When you use your Visa card, you don’t need to know how it works. When you pay with PayPal, you don’t need to know how that works either. You just register, log in with your name and password, and pay with it. Bitcoin should have that same low level of complexity in order to bring about mass adoption.
Bitcoin is merging with large financial institutions
Agustín Carstens is a Mexican economist who serves as the general manager of the Bank of International Settlements.
Of course, it’s impossible for any global currency, even a decentralized one, to exist without interaction with the world’s financial infrastructure. Bitcoin should be more integrated, and that idea is already starting to gain steam. Bank of America plans to store crypto for its clients. Goldman Sachs will issue a crypto dollar, and the US state of Arizona wants to allow its citizens to pay taxes with Bitcoin.
“If authorities do not act preemptively, cryptocurrencies could become more interconnected with the main financial system and become a threat to financial stability.”
The wheels are already turning, integration has begun. So it’s safe to assume that as Bitcoin becomes accepted by the financial institutions it would be pretty hard to cut it out of the system now. It’s likely that there are a lot of lobbyists and a lot of money at stake. Now it’s time to spread that money to the general audience.
Crypto payments need simple but secure interfaces for human users
Vitalik Buterin is the founder of Ethereum.
As we’ve learned, the current interfaces for using crypto is incomprehensible for a regular user. Sending coins to various unreadable (for a human at least) addresses requires a lot of attention. One little mistake can result in the loss of the sent coins. Also, let’s not forget about the loss of the private keys, for example, as a result of a broken hard drive or a lost USB stick – once the private key is lost, it’s impossible to recover it without a backup – unless, of course, you can remember it, but that is quite impossible for most people.
“IMO the #1 user experience need for crypto continues to be secure key management solutions. Multisig, scorched earth vaults, uPort-style social account recovery, hardware wallets, all good, but lots of work UI side (and formally verifying the actual contracts!) left to be done.”
The next step to making crypto more commonplace should be the implementation of more features that users are accustomed to – multi signatures, recovery, any way to restore lost wallets, at while keeping that same simplicity we’ve been talking about earlier. It shouldn’t be harder than recovering the password from your email account, or at least from your online bank account. Literally, it should be like a bank that uses crypto instead of fiat. Are there any examples of these kinds of banks out there?
A safe mobile bank for using crypto in daily life
Dean Nolan is the CEO of Bitsafe.io, an application for Bitcoin payments.
Modern apps for online banking include many things: paying bills, tracking expenses, creating various accounts for one user for various budget items. All these should be realized as well in a crypto banking application.
Crypto applications can become as popular as the regular banking applications if all necessary conditions will be met: users must be sure that their Bitcoin is stored safely, and must have a similar experience. It must give them all options currently available in a banking app: receiving and spending their funds, setting spending limits, keeping track of their spendings. Such apps as BitSafe have all these features and this particular one is almost here, with the app 80% complete and an MVP soon to be released!
So, what needs to happen before crypto becomes widespread?
- Easy-to-use interfaces, similar to current banking apps.
- More safety when using it and built-in wallet restoration tools.
- A proper infrastructure for merchants to receive such payments.
- Support from large institutions.
All these traits, once put together, will bring mass adoption more than just a little bit closer.
Thanks to the Howtotoken Agency experts for the information and comments provided for this topic.