In the last few years, we have been constantly reminded about how the bitcoin genie is out of the bottle, and that bitcoin is here to stay. Although this statement is widely regarded to be valid and true, many pondered over the fact that bitcoin has been around for 10 years now, and wonder why bitcoin hasn’t attained mass adoption and widespread use.
To gain some perspective, it would be helpful to look back at a very matured and important technology that is used in everyone’s daily life: Electronic Mail, or EMAIL.
The History of Email
If we were to look at email’s historical timeline in the course of its development and adoption, one can perhaps get a hint of how that correlates with bitcoin and the blockchain technology, and understand why bitcoin mass adoption may take a little longer than a decade.
From the timeline chart above, some may be surprised to discover that emails had been around since the early 1970s, with Queen Elizabeth II being the first head of state to send one in 1976.
Email had been quite difficult to use since then and through the 1980s, and it wasn’t until the mid-1990s that email became easier to use for the general population.
By 1997, 10 million users around the world had free webmail accounts like Hotmail. Mass adoption of the technology known as email only became possible when emails were made easy to use with the advent of graphical user interface and webmail.
In comparison, in the case of bitcoin:
By 2019, leading cryptocurrency exchange has over 13 million registered users, and a conservative estimate of 20 million people around the world are bitcoin users and holders. With some users having multiple wallets, there are now 32 million bitcoin wallets set up across the globe.
To put in perspective:
It took bitcoin 10 years since its inception to reach 20 million users worldwide.
It took email 25 years since its inception to reach 10 million users worldwide.
Bitcoin had attained twice the userbase of email in less than half the time. As both these technologies revolve around the internet, one can presume that this is also because there are more internet-savvy people today than there were 20 to 30 years ago.
The History of Bitcoin Prices
Bitcoin made its debut in the world in 2009. Back then, bitcoin held no value and was only sent amongst cryptography fans and early adopters who wanted to experiment and play around with it.
It wasn’t until a year later when someone by the name of Laszlo Hanyecz offered to pay 10,000 bitcoins for two large Papa John’s pizzas to be delivered to him. His offer was posted on the bitcointalk forum and was picked up a British forum reader, who bought and have the pizzas delivered to Hanyecz in exchange for 10,000 bitcoins. This was the first time bitcoin had been used in a real-world monetary transaction, and the $25 that was paid for the 2 pizzas gave bitcoin its first virtual value of $0.0025 ($25/10,000).
That fateful day on 22nd May 2010 is now fondly known as Bitcoin Pizza Day, and bitcoin users the world over celebrate this day every year by having a pizza meal. At 5-digit prices per bitcoin, those 2 pizzas would turn out to be the world’s most expensive pizzas today.
Over the last 10 years, bitcoin prices have seen its ups and downs, but there are a few important observations:
- The use and adoption of bitcoin by businesses, merchants and users have grown steadily.
- A few governments of nations such as Japan and Australia had begun treating bitcoin as money.
- Some governments of nations which had viewed bitcoin unfavourably previously are now more accepting of bitcoin as a commodity.
- The yearly lows of bitcoin prices have been climbing steadily. See table below.
|YEAR||LOWEST BTC PRICE (USD)|
From the table above, we can see that bitcoin prices have only gone up steadily over the years. Most bitcoin detractors focus on the yearly highs and their subsequent falls as proof of bitcoin’s unreliability, but it is the yearly lows that are a reflection and true testament to bitcoin’s resilience over the years. The yearly highs are often due to temporary hype and are only a mirage of bitcoin’s actual value.
So Why Haven’t We Seen A Bitcoin Mass Adoption?
Bitcoin and its underlying blockchain is a “new” technology, and as with most new technologies, there will always be resistance. Over the last few decades, we have seen disruptions and resistance to new technologies in the following instances:
- Nokia’s reluctance to adopt a newer operating system to replace their dated Symbian OS on their mobile phones.
- Kodak’s reluctance to pick up digital photography fearing it would affect their dominance in film sales.
- Disruption by Airbnb and ridesharing (Uber, Grab, Lyft etc.) to their respective industries.
- Resistance and skepticism to email and the internet, as the following video illustrates:
Yes, even the email and the internet that we have grown so fond of and dependent upon today were once shunned by some as an invasion of privacy and the source of other ills of society.
And it is usually noticed that those who do not keep up with the trends in technologies that prove to be beneficial to the way humans operate daily, often would become obsolete in their own industries. A couple of companies mentioned above serve as good examples.
Challenges Faced by Bitcoin
There have been a number of challenges that had slow down bitcoin mass adoption, amongst which are:
- Government Regulation
Governments do not know how best to regulate and apply tax on cryptocurrencies, and until a suitable framework can be established, cryptocurrencies will remain in the grey area. People will still be able to use bitcoin to send funds across international borders, but they will need to declare their identity to comply with KYC/AML regulations, which shouldn’t be a problem for most people without nefarious intentions in mind.
- Use and Implementation
Bitcoin had been rather difficult to use in the earlier years and since then, many wallet options and exchanges have been providing bitcoin and cryptocurrencies with the infrastructure in needs to thrive and serve the global needs. Those of the previous older generation may find some difficulties using a new technology like bitcoin, and some still find it hard to do online banking today, but the millennials of today are fast picking up on this trend of digital currencies and this will be the way they operate in the future.
We often hear detractors talking about the 7 transactions per second with bitcoin and how it could never be used as a means of payment in the real world. They forget that bitcoin is programmable money, and with newer developments, bitcoin can be made to scale much higher in terms of its usability.
- Volatility and Speculative Nature
Bitcoin has the features that make it poised to be a currency, but its speculative nature at the moment causes it to be wildly volatile. People see it more as a way to make some money trading in and out of it, and the people who use it as a payment method is still a small proportion. You can use it to send money without worrying about the fluctuations in value by converting it to cash immediately upon receipt. However, the number of people who treat it as digital gold, store of value and safe haven asset is fast growing every day.
- Reputation of its use in the procurement of illicit substances, money laundering and the funding of terrorism
These fears are unfounded because Bitcoin is pseudonymous, not anonymous. In fact, fiat currencies are more anonymous and can be physically moved around without detection. With bitcoin, exchanges are tied to your identity when KYC and AML regulations are complied with, and the conversion between fiat currencies and bitcoin are recorded. The transfer of bitcoin can also be tracked on the public and transparent blockchain. A number of other privacy altcoins in recent years have also made bitcoin the lesser favourite currency for illicit activities.
Mobile phones have been used by terrorists to detonate bombs remotely but you don’t see a call for a ban on mobile phones.
Emails have been used by various parties to conduct scams involving money and identity thefts on a daily basis, but you don’t see a call for a ban on email.
The reason is simple. These technologies offer utility and benefits that far outweigh the crimes that are carried out with them.
And bitcoin is no different.
Remember that the internet is still a hotbed for many of the criminal activities today such as identity thefts, cyberbullying, child pornography and other social ills, but that has never stopped anyone from using the internet or calling for its ban.
The reason is simple. The internet has its utility and benefits that far outweigh the problems that arise from its use. Email and instant messaging allow fast communications much needed in the global marketplace today. To avoid the scams and pitfalls that come with using emails without resorting to the old-fashion postal method, one needs only to be educated and be more aware of how scams operate or learn how to prevent becoming a victim of identity theft.
With bitcoin, it is the same. Its utility and benefits as a payment system and immutable ledger make it a safe and viable option as a form of money. It allows fast borderless transactions of value much needed in the global marketplace today. There will be resistance to its adoption for sure, as we have seen with the internet and email in the early years, but this is a new technology that will definitely be pervasive in human culture and society. In time to come, people will understand the advantages of bitcoin and learn to adopt it in their daily use.
A Case for Bitcoin Mass Adoption
As more people start to buy and use bitcoin, its price will gradually rise over time. As bitcoin price reaches new highs, even HODLers will eventually sell off or pay in bitcoin, leading to a new economy with a more even distribution of wealth. This would ultimately cause bitcoin price to stabilise and become less volatile, making it a suitable global currency, leading to a bitcoin mass adoption.
We changed the way we devour news and information with the advent of blogs, online forums and YouTube.
We revolutionised the way of sending messages across borders when email arrived and displaced the postal service.
We achieved the ability to stay in touch conveniently when social media, video conferencing and instant messaging made the penpal mode obsolete.
All the above are technologies that better human life, at practically no cost and virtually without restriction. They are the progress of human civilisation made possible with the internet.
And yet, we haven’t done the same with the transfer of value or money. At least not with the same speed, cost, convenience and security. Bitcoin is the solution to that, and it brings so much more beyond just money with its blockchain technology. It is the internet of money.
Remember, that even email took more than 20 years since its inception to reach mass adoption. We’re only halfway there with bitcoin, and I believe we will get there soon enough.