- Published: Monday, 03 February 2014 10:23
- Written by Editor
As with any new technology or innovation, there is always a "chicken and egg" situation before it can really take off.
For example, when the first CD players arrived, sales were extremely slow because there were few CD title choices. Music publishers were slow to produce titles on CD because the demand would be so small due to lack of installed CD players. For Bitcoin to really take off, there needs to be a wide choice of merchants, goods and services accepting it as a method of payment.
Today, while the name "Bitcoin" is rapidly becoming well known in Internet circles who are open to new innovations and quick to adopt them, Bitcoin for most is still just a word, with few really understanding what Bitcoin is, or having any sort of motivation to find out. The majority are still content to use conventional forms of payment at their favourite stores.
The vast majority of Internet users are regular people who have no interest in the underlying technologies, innovations and so on, until they become so big they can no longer simply ignore it. The same applied to the Internet itself 20 years ago. In the early days the Internet was the domain of highly technical people - in the absence of web browsers it was all command line driven - governments and academic institutions. It was not until the invention of the World Wide Web and web browser that the Internet could move forward in to the mainstream.
The barriers to Internet adoption were the difficulty in actually connecting - operating systems did not support the Internet and so third part software was required as well as a modem - which was extremely slow - all requiring technical knowledge or support. The other issue was there very few actual websites to visit, the ones that did exist were very basic and not very interesting to most.
As the Internet evolved, all of these hurdles were overcome until a critical mass was reached that brought the Internet in to the mainstream, and after that the Internet was unstoppable, with billions of users around the world.
The same principle applies to Bitcoin. Before it can become mainstream a number of hurdles need to be overcome, the principle ones being:
1. Ease of use. People do not want to have to learn anything technical, simply use Bitcoin as they would a payment card.
2. Security. People are afraid of losing Bitcoins due to their own errors or theft.
3. Availability of Merchants and Goods. This in many ways is the most crucial of all. Once there is a very wide range of merchants selling a very wide range of goods, the motive will exist to no longer ignore Bitcoin, and begin to embrace it.
4. Ease of converting Bitcoin to local currencies: Until Bitcoin becomes the primary de-facto global currency which will no longer require converting.
5. Lack of interference and regulation. From governments, banking system and other self-interested entities, so that Bitcoin is easy to use without onerous rules attached.
These same hurdles also applied to PayPal in the early days, but now PayPal has hundreds of millions of users and accounts.
Bitcoin does not have the same hurdles to overcome as PayPal because PayPal is a private service with all of the trust issues etc involved. Bitcoin on the other hand is not controlled by any central organisation, being completely distributed as a peer to peer network or users with no intermediaries. Bitcoin has the potential and no doubt eventually will replace PayPal altogether.
Every day more and more businesses and services of all sizes are accepting Bitcoin, both online and in physical locations - a trend which is accelerating exponentially.
The biggest catalysts are large well known vendors such a Overstock and Tiger Direct. It will only take the likes of Amazon to start accepting Bitcoin and then it will really take off and become unstoppable.
When will this happen? It is happening now, and faster than any other new technology before it. Within 2 or 3 years Bitcoin will have well and truly arrived.
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