If you talk to Bitcoin maxi, you might think that the world changed forever in 2009 when the digital currency was launched. However, as of 2023, less than one percent of the world’s population owns bitcoin. In a world where new technology proliferates overnight, why has it taken Bitcoin 14 years to remain niche?
It took about two years for the World Wide Web to catch fire. Between 1993 and the beginning of 1996, the websites moved on from 130 in number to over 100,000. Facebook arrived million users During her first year and 100 million users within five years. ChatGPT 100 million users within two months.
By contrast, cryptocurrency in general and bitcoin in particular have not been widely adopted.
The difference between buying and adopting
There are more 44.15 million wallet addresses that have a non-zero balance of bitcoins. As of February 2023, miners process more than 250,000 transactions per day. When you add the number of people who have traded cryptocurrencies on the exchange, the number goes up. Including Blockchain.com and Coinbase, the number of wallets holding BTC is growing to 170 million.
Many people bought Bitcoin as a speculative investment. However, this data shows that more than two-thirds have moved it to a crypto wallet. This behavior indicates that although people are willing to hold bitcoins, they may not want to Uses He. She.
To the average person, Bitcoin only caught his attention when people made (or lost) fortunes due to its volatility. Her story is one of speculative investment, not of world-changing technology or currency. They may be willing to throw some money at the digital currency as a speculative bet. This does not mean that they see much more than that.
Why wasn’t Bitcoin dealt with?
There are many reasons why Bitcoin has not remade its image in the public eye.
1. Lack of understanding: Bitcoin is still a relatively new and complex concept. This makes it difficult to understand how they work or why they are considered more than an investment. Furthermore, most consumers go for convenience above all else. Purchasing the coin, creating a wallet, and sending money to it can be quite a lot of steps.
2. Volatility: Bitcoin price has been very volatile in the past. This makes it an unreliable store of value and deters many potential investors. In today’s economic climate, potential investors are less likely to take that kind of risk.
3. Regulatory Uncertainty: Many governments around the world have not established clear regulations for cryptocurrency. This has created multiple hurdles to feeling confident holding bitcoin.
4. Limited Use Cases: Despite its potential, Bitcoin has limited use cases in the real world. It is still primarily a speculative investment or store of value rather than a medium of exchange. while ordinal Creating a stir in the crypto community, NFTs are still not widely applicable in the real world.
5. Security concerns: Bitcoin lacks a central authority to oversee transactions. Most people in cryptography see this as a good thing. However, most people see this as a cause for concern. In addition, the possibility of hacking or losing funds contributes to the limited adoption rate of Bitcoin. Most people are not ready or willing to accept the responsibility of fiscal sovereignty.
6. Slow transaction times: Compared to traditional payment methods, bitcoin transactions are slow and expensive in certain situations. This is especially true when there is a high demand on the network.
7. Lack of scalability: The Bitcoin blockchain is currently limited in scalability, which makes it difficult to process a large number of transactions in a timely manner. And when energy costs go up and the price of bitcoin goes down, this can only get worse.
8. Network Effects: Bitcoin is very popular and is the most popular cryptocurrency. However, it has yet to achieve the level of network effects needed for true mass adoption and global acceptance.
9. Merchant Adoption: Bitcoin adoption among merchants is on the rise. But it still has a long way to go before it is widely accepted as a form of payment.
10. Competition: Despite its market leadership, Bitcoin faces stiff competition from other cryptocurrencies such as Ethereum and Tezos. These competitors could hinder widespread adoption.
Is slow growth of bitcoin holders a bad thing?
We live in an economy that calculates value by growth rate. So when something is growing slowly, we are conditioned to see that as a red flag. But when it comes to bitcoin, the move can be slow and steady.
“I think Bitcoin adoption is relatively slow because we are out of a bear market.” Gus Grelaska, an NFT artist and an early adopter of bitcoin, told BeInCrypto. “But regardless of that, adoption has been growing organically and healthy (since 2009) and I don’t think that’s going to change.”
Bitcoin has healthy cycles, which has helped it grow at a steady pace. “It’s a little bit more difficult, a little bit more technical, a little bit more ideological. So not a lot of speculators jump into it during every new hype cycle.” This may turn out to allow for more serious innovation and less hot air.
Risks and challenges facing Bitcoin
Bitcoin and Ethereum have both suffered the consequences of major divisions within the community. “Civil war, like what happened in 2017 with the Segwit update and Bitcoin Cash fork, is very destructive,” Grelaska said.
“This is a huge risk that is always a potential risk,” he added. And since bitcoin can be very ideological, the risk of competing opinions is high. Looking at some of society’s reactions to the Ordinals, for example, shows how tensions can run high. Many people were enthusiastic, while the most radical were extremists Call it a scam.
Another big danger is misinformation, specifically from the government. When you look at some of the disclosures that have been suggested recently, it starts to look like hype.
“The government will try to push its own CBDCs,” Grelaska said. “Most likely they will really succeed in getting these coins out to the masses. So it is a huge risk because people will end up thinking they are buying something like bitcoin. Instead they are getting a government currency that will be monitored.”
In Grelaska’s view, this is a potential risk, because governments may take too many potential users.
And you can already see the laying of the foundations of this move. Many governments have already put up barriers to banks trying to provide financial services that include crypto. “This is not an existential threat but it will certainly affect adoption and confuse the public,” Grelaska added.
Grillasca hosts weekly classes in Mexico City and speaks at conferences around the world in Spanish and English. If his thesis is correct, education, word of mouth, and other organic campaigns will pave the way toward bitcoin adoption.
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