For quite some time many experts have argued over when bitcoin will finally end up ‘going mainstream’. Or in other words, when it will be a viable digital replacement for fiat currencies.
Unfortunately, it is safe to say that bitcoin hasn’t been able to accomplish that up till now.
And for it to really do so, there are several developments that need to take place.
Encourage and Facilitate Merchant Adoption
Above and beyond all else, for bitcoin to go mainstream it needs to be widely adopted by merchants.
As things stand there are several thousand merchants that do accept bitcoin, but that number is far from being sufficient.
Ideally, bitcoin should be accepted in most locations – either by merchants or by the payment companies that they use (such as Visa or Mastercard).
The good news on that front is that PayPal entered the cryptocurrency market recently, which is a big step forward.
Only after bitcoin is adopted by the majority of merchants in one form or other can it go mainstream. And in order for that to happen, merchants need to find it attractive.
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One of the main problems with bitcoin that is preventing it from going mainstream is that it is still very volatile.
In 2020 alone the bitcoin price has gone from a low of under $4,000 to a high of over $12,000.
Because it is so volatile, many merchants feel that bitcoin isn’t reliable. More importantly, if merchants accept it, they have to accept the risk that its value will fluctuate significantly – even in the short term.
Unfortunately trying to reduce the volatility of bitcoin is easier said than done. The price of bitcoin and its fluctuations are due to numerous factors – however, it should slowly stabilize as the currency matures and regulations are put in place.
If the price of bitcoin becomes more stable, more merchants should be willing to accept it as the risks will be lower.
Introduce Crypto-Friendly Regulations
Although some segments of the cryptocurrency community don’t like the idea of regulations, the fact of the matter is that they can be very beneficial.
Proper regulations can reduce the risk of scams, improve the reliability of cryptocurrencies, and facilitate cryptocurrency-linked businesses.
For example, recently the Office of the Comptroller of the Currency (OCC) issued new regulations that allow national and state banks to hold bitcoin and other cryptocurrencies.
Needless to say, that is a big step forward and will help bitcoin become more widely accepted.
Similarly, other regulations could help make it easier and safer for members of the public to buy and sell bitcoin, which would definitely boost its popularity.
For example, regulations governing cryptocurrency exchanges could help protect people from purchasing bitcoins and ensure their safety.
Despite the fact that bitcoin was a revolutionary new technology that was meant to act as a digital replacement for fiat currencies – it is far from perfect. In fact, there are many hurdles that could prevent them from fulfilling that goal.
Some of the hurdles that bitcoin is currently facing include the fact that it has not scaled very well. It is only capable of around 7 transactions per second, which is really low in the scheme of things.
To allow people to obtain fast approvals a bidding system has been created, but that adds a transaction cost into the equation.
Another big hurdle that bitcoin is facing is that it has a fixed supply. Already that fixed supply has resulted in scarcity, and the cost of mining bitcoin has made it unfeasible for many countries.
Last but not least, arguably the biggest hurdle faced by bitcoin is a lack of awareness. Most people simply do not fully understand bitcoin (or cryptocurrencies in general) and aren’t sure how they can buy, sell, or make use of them.
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As you can see there’s a lot that needs to happen before bitcoin can go mainstream, which is the reason why it is difficult to predict when (or if) it will.
It should be noted that bitcoin has definitely slowly but surely moved in the right direction, but it is still a long way from being a ‘mainstream’ currency.