If you do a Google search for “Bitcoin,” one of the top results is still the 2011 Wired article “The Rise and Fall of Bitcoin,” which focuses mostly on the then-falling price (it had dropped from almost $30 to under $5 in the months preceding publication). For most media pundits, the success or failure of Bitcoin is directly tied to the price of 1 bitcoin. The price, however, is simply the bellwether. Many other factors actually determine the longterm prospects for Bitcoin: merchant adoption, VC investment, usage by financial firms, etc. But the most important factor may be widespread user adoption. There are many indications that 2016 will be the year that Bitcoin breaks into the mainstream.
Also read: 2015 Proves Bitcoin Is Here To Stay
Mainstream adoption of any currency requires simplicity and ease of use in obtaining, storing, and spending the currency. If any of these three activities are difficult for the mainstream user, then the currency has significant hurdles to widespread adoption. (For purposes of this article, a “mainstream user” is one who is not particularly technically literate, but can use a smartphone and/or desktop computer with no real difficulties). Over the past few years, the Bitcoin ecosystem has been addressing these challenges, and 2016 looks to be the year it will overcome them.
From the perspective of long-time Bitcoin users, obtaining bitcoins has never been easier. Gone are the days in which you had to hope that your bank would transfer money to a Japanese account, and then cross your fingers that the Japanese company would allow you to withdraw the bitcoins you purchased. Now it’s relatively easy to obtain bitcoins through services like Coinbase, Circle, and Xapo.
The average user, of course, doesn’t compare Coinbase or Circle or X
apo to Mt. Gox, but instead compares them to Amazon or Apple. Few Bitcoin companies have yet garnered the name recognition or trust required for the crucial customer-comfort level other online merchants enjoy. However, as more and more users have successfully obtained bitcoins from various companies, they tell their friends about it, who will then get in on the action and tell their friends, creating a positive ripple effect for Bitcoin. An outgrowth of this will be an increase of consumer trust in the currency itself and the use of it. In 2016, look for increased mainstream trust in Bitcoin companies. As a result, obtaining Bitcoin will become less intimidating to the average user.
Storing Bitcoin has historically been a major technical and psychological challenge for the average person. Technically, properly securing your bitcoins requires a certain level of expertise, and psychologically, many people are uncomfortable with storing large amounts of money on something like a flash drive (such as a Trezor or Ledger hardware wallet). Although one of the preeminent features of Bitcoin is that you get to “be your own bank,” most people are more comfortable trusting a third-party with their money than holding it themselves.
Fortunately, the past few years has seen more options in this arena, so that anyone can now comfortably store their bitcoins in the manner they choose. Coinbase, for example, offers a way to store your bitcoins while enabling multi-sig so that no one can walk away with your bitcoins. For many die-hard Bitcoiners, this diverges from the ideal of independence and decentralization, but it does address a need that the average user has. A robust ecosystem will have many options in order to satisfy all types of users. Want to be your own bank? No problem. Want to store your funds with a trusted third-party? Again, no problem. As the ways to store your bitcoins have exploded, more and more people will be holding bitcoins in 2016.
Here is where the advancements made in 2015 could make 2016 the year Bitcoin breaks into the mainstream: making it easy to spend your bitcoins. Although there have been many commendable services – such as Gyft and Purse – that allow a holder of bitcoins to spend them at various online sites, there was still the hurdle of the middle man that most average users don’t want to encounter. But 2015 saw new services geared towards making spending Bitcoin more user-friendly.
For example, the new Shift Card was a step in the right direction in this area. Although some Bitcoin advocates are not enamored with a card that automatically converts bitcoins to dollars, the Shift Card makes spending bitcoins a whole lot easier for people – and uses a system with which they are already familiar. Also, Plutus is making it possible to spend Bitcoin at any NFC device worldwide – another advancement in making it convenient to spend your bitcoins. In 2016, as people begin to use these services, look for many more tools to make spending bitcoins as easy as spending dollars or euros.
By any measurement, the growth of Bitcoin from its inception to today has been phenomenal. No longer is Bitcoin an experimental currency reserved for tech geeks and libertarian die-hards. And 2016 is poised to become the Year of Mainstream Bitcoin Adoption.
What do you think? Will 2016 be the year that Bitcoin breaks into the mainstream? Let us know in the comments below.
Images courtesy morgueFile and pixabay
Spot-markets for Bitcoin, Bitcoin Cash, Ripple, Litecoin and more. Start your trading here.