Price Volatility & Complexity Are Holding Back Bitcoin Usage
A poll in the United Kingdom about bitcoin usage found the main barriers to adoption. Price swings and technical barriers stand out. Nearly 60 percent of non-users pointed to one of these two issues.
A poll in the United Kingdom about bitcoin usage found the main barriers to adoption.
Price swings and technical barriers stand out.
Nearly 60 percent of non-users pointed to one of these two issues.
A poll in the United Kingdom about bitcoin usage found the main barriers to adoption. Price swings and technical barriers stand out. Nearly 60 percent of non-users pointed to one of these two issues.
Developers are working on solutions to both problems. Bitcoin's price has become more stable since the currency's early days. It may never match the dollar's predictability, but it could eventually match gold or silver or smaller fiat currencies. The obstacle is that single days still bring swings of 30 to 50 percent.
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Several projects address the volatility question. Veritaseum and Hedgy let institutions and consumers hedge bitcoin against other assets. Circle and Coinapult take another route: they let users convert bitcoin to fiat currency instantly through their wallet apps. Hedging protects against price moves. Conversion to fiat doesn't hedge the bitcoin itself, and liquidity stays constrained when bitcoin functions as a payment system only. Yet payment use does generate fundamental value for the bitcoin token.
The usability side is improving. Wallet makers are replacing long alphanumeric addresses with human-readable names. Circle and other platforms now display balances in dollars instead of bitcoin. Apps like Fold and Purse.io entice new users with discounts. Most people still won't try bitcoin if they have to juggle currency conversions or wrestle with complex addresses.
The apps that win will solve both problems together. Abra shows what this looks like. Positioned as an alternative to Western Union and other remittance services, Abra lets people send money in dollars through the bitcoin blockchain. The platform hedges its bitcoin holdings against the dollar using smart contracts, giving users an interface as simple as Venmo.
Bitcoin adoption over the next five to ten years will turn on apps that spare users from both volatility and complexity.
MiningPool content is intended for information and educational purposes only and does not constitute financial, investment, or legal advice.
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·James Gray
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