What Hinders Bitcoin from Becoming a Mainstream Currency?
Bitcoin users have surpassed the population of Norway and Finland and its market cap has exceeded the value of fiat currencies of such countries as Mongolia, Thailand, Sudan, Laos and Nigeria.
Worldwide, more countries are working to make bitcoin a legal currency. Canada passes law to regulate bitcoin as money. Philippine and japan have officially legitimized bitcoin as a payment method. Russia has announced that it may recognize the digital currency as a legitimate financial instrument by 2018. And technically, the Bank of England, Sveriges Riksbank ( Sweden’s central bank), the People’s Bank of China(PBOC) and other banks are developing their own digital currencies. Meanwhile, the emergence of a large and a thriving bitcoin community is contributing to the wide acceptance of bitcoin.
In such contexts, it is easy to see why fans of bitcoin are so optimistic. And the fact is that Bitcoin price went from a mere $5.80 per BTC in 2011 to a whopping $1000 per Bitcoin today, and it’s still increasing. Bitcoin fans boast that bitcoin will be accepted by both currency speculators and ordinary consumers in the near future.
The potential of bitcoin is enormous, but it is not likely to become a mainstream currency, at least not in the near future.
To begin with, its high volatility hinders it from becoming a widely accepted form of currency. Wild fluctuations in its value makes it easily scare off ordinary consumers. One bitcoin could worth $1000 today and $800 tomorrow, which makes it fail to be effective as a medium of exchange and unit of account.
Secondly，the decentralized nature of bitcoin and lack of regulation has led itself useful for illegal activities, such as tax invasion, theft and money laundering. Consequently, governments often see it as problematic and media coverage of bitcoin is often negative. How could it be widely adopted when it has so many negative connotations?
Thirdly, bitcoin itself is in the midst of a civil war. The scaling debate has been dragging on for years. And now bitcoin is on the verge of splitting in two. At this particular moment of bitcoin history, there are a lot of personal attacks, rude insults and even threats going on inside the bitcoin community. And it seems that people care more about profits than the wide acceptance of bitcoin.
To conclude, the main use of bitcoin will be a store of value, until its price stabilizes and regulations are in place.