It was on January 12, 2009, when the world’s first-ever bitcoin transaction was successfully carried upon between Bitcoin creator Satoshi Nakamoto and programmer Hal Finney. The global economy was witnessing something that was never heard of or experienced before. While some took it as an opportunity to enter a new phase of technological advancement, others remain doubtful about its success in the industry. But reality says it all, and today when Bitcoin is about to complete 10 years of existence in the industry, it stands strong as one of the most trusted digital currencies in the crypto market.
Presently, cryptocurrencies are synonymous with a financial network that ensures the highest standards of security and decentralization to its customers. Their advent has given birth to a new payment settlement system, which has changed the way people used to trade earlier. The growth in the world of cryptocurrencies is clearly visible as more and more people have started playing their big bets on the wide range of digital assets available in the marketspace.
The crypto niche is flooded with digital coin and tokens offerings that continue to multiply in numbers with every passing day. The entry of a new coin in the market paves the way for new capital raising mechanism known as Initial Coin Offerings (ICOs) and Security Token Offering (STOs). The virtual currency arena has seen the involvement of some of the biggest names in the business domain in the past few years. With the pooling of huge funds, the decentralized technology has now penetrated into every possible sector one can think of. These include education, healthcare, finance, commerce, food, supply chain management, sports, entertainment, etc.
Irrespective of the growing popularity of Bitcoin and cryptocurrencies amongst the Millennials who are all set to be surpassed by Generation Z, there still remain some hindrances that restrict the mass adoption of cryptocurrencies.
This article will help the readers to learn about the four chief obstacles which have the potential to put the thought of mass adoption of cryptocurrencies in trouble. The issues have been discussed below, have a look.
Major Obstructions for Bitcoin Mass Adoption
- Complex Methodology for New Entrants
Blockchain technology, which forms the core terminology working behind the concept of cryptocurrencies, is still in its developing stage. People who gather the courage to invest in digital currencies often face a set back after failing to understand the technical concepts involved in the process. This major issue discourages the entry of beginners in the crypto domain and restricts mass adoption in a big way. To facilitate mass adoption, it is crucial to simplify the system and make it more accessible to the general public.
It is essential to give proper training and education to the people to encourage them to participate in the digital currency field. Apart from this, it is also equally important to make transactions easy for the general public. The role of private key management systems is quite critical in mass adoption as people might find management of private keys easy with these solutions. The integration of blockchain technology and businesses can be an important process for mass adoption.
- Volatility of Bitcoin
One of the major drawbacks that surround Bitcoin is that it is highly volatile in character. Media reports always consider this volatility to be a significant threat to the industry. Interestingly, the price of Bitcoin can enjoy a surge of 15% at one point in a day and can suddenly face a major downfall at the same rate the very next day or even in the very next hour.
Where traders find volatility as a means to earn profits, others feel reluctant to make investments because of it. The volatility of Bitcoin puts a monetary risk that hinders its usage as an medium of exchange. Though volatility triggers the purchasing power, it can also reduce it in a big way.
Stablecoins, which are pegged currencies, are designed to counter the excessive volatility involved with cryptocurrencies like Bitcoin. These currencies can evolve as a strong medium of digital exchange for the public as a community.
In order to enjoy the mass adoption of Bitcoin or other crypto coins, it is necessary for the existing infrastructure to be able to handle the growing number of trading activities on the network, which are performed by the expanding customer base. Another problem that exists is the substantial increase in transaction fees with the surge in the number of transactions to be validated. To solve such problems, Ethereum launched its Ethereum 2.0 project, which switched the existing network to a better and advanced ecosystem.
Notably, the Lightning Network has the potential to enhance the volume of transactions being validated per second on the Bitcoin blockchain network. However, it will be interesting to see if the efforts introduced by the crypto community to enhance scalability will show exciting results in the future and aid the mass adoption of Bitcoin.
- Speculative Approach Towards Bitcoin Amongst Commoners
The mass adoption of Bitcoin often faces a set back as a majority of people invest in them only for short-term speculative gains. By storing Bitcoin without the will to invest them via transactions results in the increase in the price of Bitcoin and makes it constitute as a store of value only.
This situation is likely to change in the future. As a substantial number of merchants are lending support to Bitcoin as a payment mechanism, it ensures that the currency will become a real exchange medium in the future.
It is essential for the crypto enthusiasts to continue putting their efforts in the development and advancement of Bitcoin and other cryptocurrency networks so that the idea of mass adoption can become a reality in the coming years.
Mass adoption of Bitcoin is still a far-fetched aim for the crypto industry as there still exist some obstacles like free bitcoin faucet which hinder the growth in a big way. It is necessary for the community to identify and accept these issues and then take the remedial measures to find effective solutions.
By imparting knowledge to the general public, giving training about usage and operation, and by making access user-friendly, the crypto community can popularize the concept amongst people at large. As this will take time, it becomes crucial for the industry to have patience and do what is best for the crypto arena as a whole.
As the industry is striving hard to overcome these limitations, the mass adoption of Bitcoin can surely become a reality in the future.