Why hasn't Bitcoin gone mainstream?

Issue #6

Harry Glynn

Bitcoin came into the world quietly but has since generated a lot of hype.

A promise of a global digital currency, not controlled by any bank or government.

That's still true, but for some reason, it hasn't gotten the traction that was initially hyped when launched over 10 years ago.

By some metrics, Bitcoin is an overwhelming success. Most people have heard of it, and it's price currently hovers around $10k USD.

However, it's a niche asset that hasn't gotten mainstream adoption outside of die-hard enthusiasts.

Why hasn't it gotten more traction?

While Bitcoin is undoubtedly a great achievement of technological innovation, it has some critical flaws.

The first is that it's hard to use. It's not that hard but you have to get people to overcome the learning curve.

The second is the network effects of money I alluded to in my last post. It's very hard to get people to accept a currency when others don't accept it.

But perhaps the 2 most important reasons are the volatility and the cost.

Bitcoin is an incredibly volatile asset. It makes very little sense for anyone to accept it when the value could go up or down within the hour.

The other is that at scale, transacting with Bitcoin is very expensive. Because the number of transactions it can process is extremely limited, people need to outbid each other for their transactions to be included. The more people wanting to transact, the more expensive transactions become.

High cost and high volatility are enough to make Bitcoin impractical for day to day use.

Bitcoin proponents recognized this and have moved away from trying to be a type of currency, to something more like a digital gold.

It remains to be seen if a digital gold is something mainstream society finds useful.