January 28, 2014
Welcome to part two of the four part series 50 Bitcoin experts share their views on what the future holds for Bitcoin. We look into the following:
- How the regulation around Bitcoin will evolve over the next 12 months
- The processes needed to get the mainstream to adopt Bitcoin
- What impact the FBI’s supply of Bitcoin will have on the ecosystem
- The big question; What will Bitcoin be trading at in 12 months?
In part two we look into the processes needed to get the mainstream to adopt Bitcoin. Here’s what the experts had to say:
J.R. Willett, Founder of Mastercoin responds:
Distributed currency needs to be secure (much harder to steal) and price-stable in order to be useful to the average consumer. Projects such as Mastercoin are solving both of these problems.
Kevin Barnes, CEO of Playcoin Entertainment responds:
The largest corporations accepting bitcoin as a global payment form. The more your daily life sees bitcoin being accepted as a payment form, the more your programmed to adopt it as such mentally. The media supporting it’s usefulness.
Teemu Päivinen, CEO of Coinmotion responds:
For Bitcoin to have value as a payment method, two things need to happen: It must be very easy to obtain bitcoins and it must be very easy (and cost effective) to use them to purchase a wide variety of goods.
This is something we at Coinmotion are trying to accomplish. We want it to be easier to purchase goods with Bitcoins, than it currently is using credit cards, paypal, etc.
Many people are worried, this can never become a reality due to Bitcoin’s volatility. The solution is making the process so fast and easy, the effect of volatility is essentially mitigated.
An increasing amount of transactions, will then in turn stabilize the Bitcoin economy, enhancing its value as a payment method.
Keny, Founder of GetToKnowBitcoin responds:
I think education is key. Explaining how bitcoin works can be confusing and intimidating at times. The early adopters hold the responsibility of helping and educating new bitcoin enthusiasts.
I think it will be important to keep things simple and take the time to answer questions. As bitcoin continues to mature, their will be programs that simplifies it for people as well.
There needs to be a very simplified method for security or perhaps a program/app that keeps bitcoins safe for people automatically.
Michal Handerhan, CEO of BitcoinShopUS responds:
The first step for Bitcoin to be adopted on the mainstream level is US government’s stamp of approval, the rest has already been done – ATM machines, Bitcoin Exchanges, Merchant Accounts, Bitcoin Wallets, Bitcoin Payroll – the system is up and running 🙂
Wouter Vonk, Founder of Bitgild responds:
Merchants already play a big part in this to raise more awareness. Currently providers like Bitpay and Coinbase are adding big names to their directories on a daily basis. This will help to drive bigger adoption.
However, for bitcoin to go really mainstream we need services to make bitcoin even more lightweight and easier to handle.
As soon as we are at a point that I do not have to explain my grandma she has to create a cold wallet and should use 2-factor-authentication before she buys bitcoin it is ready for mainstream adoption.
Ron Gross, Mastercoin Foundation Executive Director responds:
Nothing is needed beyond what is already going on. We see a triangular wave of individuals, companies, and government entities all trying to take a part of the cryptocurrency revolution.
Each new development in either sectors pushes the momentum of the other sectors forward. Governments who will actively seek to define and cooperate with Bitcoin based initiatives will create and maintain a huge lead over slower governments.
Alexander Lawn, director of KnCMiner responds:
Most crucially businesses to apply the transactional cost reduction to consumers. If you were told you could save 5% on every purchase made using Bitcoin as a payment means over the standard electronic payment means, which would you choose?
Jonathan Speigner, CEO of LiteTree responds:
I believe we are well on the way but a clearer stance on how the US government is going to treat crypto currencies is needed before the general public will be comfortable using it.
Offline retail is needed soon, there are a few startups that are focused on providing payment processing services for online retailers, as this list of places grows where you can spend bitcoins online we will see providers like square make this an option at places like Starbucks.
Esther Tung at The Bitcoin Co-op responds:
Diversifying the demographic. Even though it’s sort of a tautology, it’s something that’s overlooked. Women make up at least 50% of the mainstream, and we’re dramatically under-represented right now in Bitcoin.
It needs to be more accessible to older people who may not have the eyesight for smartphones nor the werewithal to learn new technology, and it needs to be accepted by businesses and non-profits of varying sectors and causes, not just in tech-related fields.
There’s a need to disassociate Bitcoin from its uber-technical side or from its early roots among anarcho-libertarians.
Not that there is no space for these things in Bitcoin, but if that’s the only impression the average person gets of Bitcoin, it will be much more difficult to push it to the mainstream or to be able to work well with regulators in convincing them that the best way to regulate is to do nothing about it.
Finally, reaching out to the world’s 3.5 billion unbanked before the banks get there. The upsides of using Bitcoin over fiat is amplified dramatically in countries going through financial instability and corruption, as well as in areas where people have at least mobile phones (ideally also the Internet) but no bank accounts to normalize Bitcoin first before banks can come in.
Kenya’s the go-to example for that. That’s the great thing about Bitcoin — it really forces people to remember that systems outside of the developed west exist.
Dominik Weil, Co-Foudner of Bitcoin Azerbaijan responds:
Well, from the technical side, there are still some obstacles as far as I see – the current 7tx/s limit is quite to low to provide a global payment network; the exploding size of GB, which you need, if you want to run a full node etc.
These kind of things are definitely the biggest risks to Bitcoin – and well, no one said, there is no risk, if you invest large amounts of your money into Bitcoin.
Still I believe that all these aspects will be solved over time – and all these smart brains out there, which are currently working on various stuff in order to improve the given state of technology will come up with a solution for these current or upcoming issues.
Given all the brainpower which is involved in this largest opensource project ever in history of mankind – as well as the big chunks of money which are flowing into Bitcoin – I can still sleep rather well at night.
No one knows, how this whole thing will play out in the end and if Bitcoin can keep its promises (or even deliver more than we expect at the current stage) – but I definitely know, that it is right now probably the most interesting and promising area worldwide, which you can work in.
This is exactly why at one point in the past I decided: “Well, you dont know how this story will end – but you definitely have to go for it. Even if this whole thing collapses at one point – you would regret it, to not have even tried to be a part of this disruptive movement and deliver your fair share to make it happen”.
Even if Bitcoin would be broken tomorrow – I still made such a lot of experiences since I am more actively involved in this project, that it was worth it without any doubt.
But back to your question: From the socio-economical perspective, I don’t really see any hurdles, why Bitcoin should not become a payment method adopted by the mainstream.
The advantages of payments via Bitcoin are so obviously clear, that the only thing we need to do now is educate the people/merchants on Bitcoin.
This will take some time, but if you look for example at the exponential growth of companies like Bitpay, you see: It is already happening – and so far I don’t see any reason, why it should slow down at this point.
Over the last weeks, big companies out there accepted Bitcoin as payment method already – which seemed to most of the people quite unrealistic to happen in such a short range of time just 12 months ago – and well, I am interested to see, what big names will accept Bitcoin within the upcoming 12 months.
And in general my experience with Bitcoin so far is: Everything always happens much faster, then even your most optimistic-realistic expectations would predict. So at this point, the only real “risk” here is, that the free market will come up with a even better solution then Bitcoin.
Antony, Business Development at itBit responds:
For merchants and customers to use Bitcoin to transact, we will probably see Bitcoin share existing payment networks first.
John Delono, Founder of Bitcoin Reviewer responds:
For Bitcoin to go fully mainstream, it needs to be easier to obtain. At the moment, it can be a lengthy process buying Bitcoin from exchanges, which presents a huge barrier to entry. Also, it’s important that online businesses start to accept the currency.
It’s already starting to happen with large websites like Overstock and Namecheap. Online Bitcoin casinos are also attractive to potential users, as they allow safe and legal gambling to take place.
Eddy Travia, Co-Founder of Seedcoin responds:
Simply more merchants accepting Bitcoin and a general, unbiased education and information about Bitcoin, both tasks we support at Seedcoin.
Nikos Bentenitis, Founder of CoinSimple responds:
Tools that help e-commerce merchants integrate Bitcoin into their platforms, user-friendly wallets and secure online platforms, will affect adoption the most.
Frederic Thenault, Founder of iceVault responds:
We need a better, safer-to-use, easier-to-use ecosystem of services, products and companies linked to Bitcoin. Considering all the news stories around hacking, theft and loss of Bitcoins, it’s quite legitimate that many people (and companies) are still worried about adopting Bitcoin.
That’s why it’s important to have companies like iceVault.ch that provide safer solutions for Bitcoiners, offering among other things a very secure cold-storage solution in the Swiss Alps.
We also need easier ways to buy/sell Btc, and more adoption among merchants, so that people can actually do more with their bitcoins.
The more people and companies use Bitcoin for payments, the more liquidity there will be in the market, and the less volatile Bitcoin ought to become – which will work as a virtuous circle, then encouraging more people and companies to use Bitcoin.
Aaron Williams, Founder of Atlanta Bitcoin responds:
We’re going to need to see some more changes in the Bitcoin protocol first. Auth/completion type transactions which are used for Fuel, Restaurants, bars, etc will be a huge step in the right direction.
Existing POS systems need to develop capabilities to accept Bitcoin for payments. There are a bunch of new POS systems being developed but the real numbers are going to come when some of the POS systems with a large base of existing customers develops support.
Imagine a merchant being able to just turn on Bitcoin support then see how it impacts their business.
Michael Dunworth, CEO of snapCard responds:
Well outside of the USA and in countries with less fortunate currencies, just give them a way to buy BTC, and they’ll shift towards it. It’s far more attractive than their current financial system.
In the USA and countries with strong currencies, adoption will increase when merchants start passing on the benefits of low transaction fees to the users.
Gabriel Miron, Founder of MEXBT.com responds:
We need digital places were we can buy with Bitcoin and exchange them for Fiat with out no major impediment. Ones we have a decent volume of both, people will start adopting it.
It’s the easiest, fastest and cheapest way to move money in the world. It makes Paypal, Western Union and Credit Cards obsolete… It’s a matter of time.
Daniel Mross, Director of The Rise and Rise of Bitcoin responds:
It needs to be safer and easier to use. The ecosystem is really just now starting to flourish, but for the average user, bitcoin is still complicated.
I think mass adoption will come in the form of 3rd parties in the payments industry that can make bitcoin accessible and user friendly.
Most people already use 3rd party payment systems, but they are always required to connect with a bank account.
Bitcoin allows the cash economy to function online, and that opens up internet commerce to a huge new customer base around the entire world.
Alan Silbert, CEO of BitPremier responds:
Business adoption is key, and exchange services like BitPay and Coinbase are important in this respect.
I think it is easier to get businesses on board if the currency volatility risk is mitigated, then work in the future to get them to hold more bitcoins, a bit at a time.
That is a much easier transition than getting a business to hold 100% of the bitcoins they receive from the get-go with the current volatility.
Mrs P, the founder of The Bitcoin Wife responds:
There really needs to be a paradigm shift in how we personally approach trust and security online.
Decentralization is a good thing, but we need to recognize and take every precaution in protecting our Bitcoin.
Fully understanding and appreciating that there is no one to reset your password or recover stolen funds if you haven’t done your due diligence in securing your wallets.
We need to make security fool-proof in order to attract the masses before we see wide spread adoption.
Mark Norton, from Bitcoin Warrior responds:
The ball is already rolling on this. Overstock now accepts Bitcoin, as do Shopify and Subway Sandwiches: the drumbeat of businesses that accept Bitcoin is getting louder.
What we need for more merchants to accept Bitcoin is more people eager to spend Bitcoin. When business owners see people willing to spend in Bitcoin and begin to understand the advantages they have over credit cards and even cash, you’ll see the avalanche really begin.
One thing to note, though, is that a deflationary currency like Bitcoin has a tendency to cause people to save rather than spend. Paul Krugman has written a lot about that and sees it as Bitcoin’s fatal flaw.
In fact, what we’ve seen is that a spike in price has meant a spike in spending. When the price spikes, people have a tendency to want to enjoy those profits and spend.
That being said, there are also a lot of whales out there sitting on large Bitcoin fortunes. It would be nice to hear about more philanthropy by these folks.
Bill Gates used some of his wealth to buy large numbers of computers for schools. If a Bitcoin millionaire did this, but asked the vendor to accept Bitcoin, it would convert a large company to Bitcoin, put more bitcoin into circulation, put Bitcoin more in the news in a positive light, and convince more people that Bitcoin is something they want to be involved in.
Alan Donohoe, Founder of Bitcoin Association of Ireland responds:
The Bitcoin revolution was started online, and more and more online retailers will increasingly accept it. This will help fuel the growth.
To become mainstream, we are going to need some regulation. That will be a very interesting situation to see how governments will see fit to regulate it.
The law makers around the world we need to seek advice at the highest level in the Bitcoin industry to ensure the worldwide adoption of Bitcoin grow beyond its infancy in the correct manor.
Jeremy Bonney, Product Manager at CoinDesk responds:
It’s still not as easy to buy and use bitcoin as it should be. We’re seeing a lot of companies like Coinbase and BitPay making all of that a lot easier for both consumers (to buy and spend bitcoin) and merchants (to accept bitcoin).
There’s also still a lot of price volatility, which makes people hesitant about spending their bitcoins. But as the market matures, and more and more big retailers like Overstock.com accept bitcoin, people will be more inclined to use it as method of payment.
Ken Lo, CEO of ANX responds:
More ways to access bitcoins is crucial to the bitcoin adoption. Users need a way to be able to easily buy and sell bitcoins. More exchanges or exchanges need to be able to reach out to more customers is one way.
This will stop the hoarding issue as well. If they can spend the bitcoin and instantly buy back, there’s no reason why they need to hoard, it’d make no difference because their net bitcoin position would be the same except they can now promote and use bitcoins as well which i’m sure a lot of people would like to do.
Even the speculators are supporters of using bitcoins, we just don’t have the right infrastructure in place yet.
Adrian, Founder of SatoshiBet responds:
Bitcoin is in every way a better solution than what is currently out there to transact money globally, cheap and fast, for even the smallest of transactions. What bitcoin needs is a healthy eco-system of businesses to support the protocol.
There are still so many untapped opportunities for bitcoin, I do believe entrepreneurs will catch up eventually and for every one who does, mainstream adoption will come a little closer.
Jaron Lukasiewicz, CEO of Coinsetter responds:
Bitcoin needs to become easier and safer for the non-tech person. Companies will continue to emerge to make this happen.
Kingsley Edwards, Founder of LeetCoin responds:
Companies like Coinbase and BitPay need to continue to make it easier to buy and spend bitcoins.
Also, new services that utilize Bitcoin, like LeetCoin, will help bring-in adopters from other industries by introducing new ways to use the crytocurrency.
Francisco Tomas Buero, Co-Founder of Conectabitcoin responds:
Basically, time and evangelization.
Nubis Bruno, Co-Founder of Conectabitcoin responds:
Higher market cap to prevent price fluctuations, a bitcoin bank and an instant bitcoin payment processor.
Johnathan Turrall, CTO of MetaLair responds:
A lot of people don’t realise how well designed Bitcoin is as a cash system until they actually use it to make payments and transfers. However, we are still at a point where we are reliant on software wallets and no software wallet can be 100% secure.
I’m hoping to see the introduction of hardware wallets soon and ones that get the use of public private keys right in a secure way.
If someone can make an easy to use hardware wallet, say in the way the iPod made music accessible; I think we could well see the ubiquitous adoption of Bitcoin and cryptocurrencies.
Rodolfo Novak, Founder of Coinkite responds:
We see Coinkite as part of a “second wave” of bitcoin services that make it dead easy to use bitcoin for the mainstream.
Our payment terminal and debit card together are the missing pieces that fit well into the existing merchant / consumer thinking.
Kenneth Metral, CEO of Coingig responds:
Incentivizing the masses to buy and spend their coins by providing discounts at restaurants, coffee shops, products, and services would be a great start.
However, the biggest issue in North America is that Bitcoin is primarily viewed as an investment.
The Bitcoin network & protocol lends itself to so much more in a multitude of ways: it can allow for unregulated international money transfer services to exist without astronomical fees, as well as creating new avenues for financial benefits on a global level such as collecting investments, issuing loans and even donations to operate over.
Mike Yeung, Founder of SFU Bitcoin Club responds:
Bitpay and other merchant services need to push for hardware based point-of-sales system (kind of like a debit/CC terminal). Something like a mass produced cheap LCD based screen that displays QR codes for end-user to scan would be very nice.
This makes bitcoins familiar enough to traditional point-of-sales so that it doesn’t scare businesses away. Fees to convert the accepted bitcoins into fiat must be competitively low (Bitpay is already doing a great job of this).
The savings for merchants accepting bitcoins must be great enough so that it can both 1) earn the merchant a bigger margain 2) allow the savings to be constantly passed onto the consumers.
But the above point might not be possible because apparently credit card companies have contractual rules against merchants giving discounts based on what payment method the consumer uses. I believe this tactic is not fair; it’s not how a competitive market should work.
On the other hand, there has to be a much easier way for the average person, including one’s grandmother, to use bitcoins.
Blockchain and other wallet apps are great, but the average joe may not have the time to figure it all out. So at some point phones may have to come pre-packaged with wallet apps. And for those without capable phones, there should be fillable NFC cards one can easily purchase at convenient stores to hold bitcoins.
Where I really see Bitcoin taking off in the next few years is its use as a replacement for Paypal, Western Union, and bank wires… I believe this was the original intention of Satoshi. He only called Bitcoin a payment network in his whitepaper, and never a currency.
And there’s all the reasons in the world to use Bitcoin for remittances over most other traditional methods. The only thing lacking now is a fearless group of investors, ready to push a “Bitcoin Union” to squash out WU and the likes.
Zach Harvey, CEO of Lamassu responds:
Accessibility and ease of use. I think we will see a lot of merchants accepting Bitcoin as an alternative to credit cards this year, and I believe that will encourage entrepreneurs and businesses to work on solutions to make dealing with Bitcoin simpler.
Vitalik Buterin, Author at Bitcoin Magazine responds:
Banking integration is the main challenge; businesses need ways to integrate Bitcoin efficiently and then immediately sell the bitcoins if they do not want to get exposed to the price volatility.
The other main challenges are regulatory certainty, public relations and providing evidence that there are actually enough consumers willing to spend bitcoins to be worth the risk.
Eric Calouro, Founder of NewsBTC responds:
Bitcoin needs to be easier to use. As someone who’s worked in IT, I’m well aware that much of the general public is lax with electronic security.
So you can bet people won’t be making wallet backups, they won’t be guarding their private keys, and they certainly won’t know there’s malware on their computer logging their keystrokes and taking their funds.
However, I think Coinbase and similar companies are a great start to making bitcoin more user-friendly.
Second, there needs to be consumer protection. By design, the bitcoin protocol does not allow for transactions to be reversed, and for the people I’ve spoken with, they find that more scary than they do a feature.
One of the core concepts of bitcoin is to move away from banks and third-parties, but I wouldn’t be surprised if these solutions turn up to offer purchase protection for consumers.
Frank Schuil, CEO of Safello responds:
Most of the necessities to gain mass adoption are already in place or being developed as we speak. Safer exchanges, merchant APIs and mobile apps are all emerging solutions to an inefficient market.
It is a natural progression from Bitcoin as an investment opportunity to a form of currency. The tipping point will be when banks and governments start embracing Bitcoin after a push from established market players.
With Zynga and Overstock trialling bitcoin purchases early 2014, we are off to a very good start.
Elizabeth Ploshay, Manager at Bitcoin Magazine responds:
Individuals need to understand Bitcoin in basic terms and how it truly will benefit the US economy and economies around the world.
One area to dramatically increase the adoption of Bitcoin in the US and other countries will be to get more women involved. Right now approximately 90% of women control household finances in the US.
As more women become informed about Bitcoin, many will want to use it and increase the use of Bitcoin in household finances.
Tony Tam, Co-Founder of Bitcoin Pulse responds:
The obvious answer is something that brings more merchants into Bitcoin and also easier mechanisms for people buying and using Bitcoin (e.g. better wallets).
But also some of the traditional guarantees of fiat currency systems – e.g. protection for buyers/sellers.
Flavio Rump, Co-Founder of Bitcoin Pulse responds:
Right now the credit card is still a much better product for consumers: They have protection, they get cashback/miles and also, it is so easy to use. Just take it out and swipe it.
Buying things with bitcoin: take out phone, open the app, scanning QR code, maybe have 2 Factor Authentication, so entering another password, confirming it, usually takes longer than just swiping the card
It is also not clear why people would buy things with bitcoin if they paid exchange fees to get them, if they can pay with CC and no exchange fee. (unless of course the merchant offers bitcoin discounts or is in another country, but those are the small minority of transactions in a persons everyday life)
Vytautas Karalevičius, CEO of Spectro Coin responds:
Firstly, more professional people from finance and especially payment industries have to get involved in virtual currencies economy.
As now the biggest limitation for Bitcoin to be used for its key purpose (way of payment) is lack of competence and expertise in the economy and highly speculative behavior of most market players.
Secondly, media has to start educating society how Bitcoin can benefit their businesses and life’s by providing efficiency and lower costs during their payments and how this payment system allows for development of new types of businesses due to its flexibility instead of solely focusing on speculative aspect of Bitcoin and creating momentum in Bitcoin price by so causing higher volatility and making it less attractive as medium of exchange.
John Backus, Co-Founder of BlockScore responds:
Mainstream adoption is mostly a function of time: Gradually more firms will integrate bitcoin and Bitcoin’s growth will continue to be of interest.
Morgan Rockwell, Founder of Bitcoin Kinetics responds:
The main problems that need to be solved for main stream adoption are being solved at this very moment. The problems that the blockchain can solve are numerous.
All machines including laundry machines, gas pumps, vending machines, pool tables, arcade machines & more can now accept Bitcoin using Bitcoin Kinetics.
Companies like Gyft, BitPay, Coin base & Bitcoin Kinetics are leading the way people interact with Bitcoins.
Daniel, Founder of Dagensia responds:
I think we need more payment systems and payment processors. We are currently developing our own payment processor that will enable Bitcoin payments in Europe.
Simon Edhouse, Managing Director of Bittunes responds:
Payments can flow two ways. The term “method of payment” hints at one of the core issues for me in this space… and that is that most Bitcoin aficionados are looking at the challenge for Bitcoin being: “How to get people to pay for services with Bitcoin”
When end users find that various things they do can actually ‘earn’ bitcoin, they will start getting excited about using the currency.
Just like in the micro-payments area, the where the bitcoin-J develepment team have designed the protocol presuming all micro payments will be going from client to server, i.e. to only work if sent from client to a server port.
The key Bitcoin developers have obviously just seen the issue through a legacy web lens, where users pay, like to a paywall for instance to view a web page. But from our perspective, this is upside down. PREDICTION: This will become a big issue.
Also the role of Miners… and the fact that everyone seems to believe that ‘Miners’ and Crypto-Currencies must go hand in hand. (its getting more and more expensive to mine BTC and related currencies, so Miners have been awarded the right to charge fees for validating transactions.. HINT: You don’t need miners to achieve distributed validation of transactions.
Peter Seed, CEO of Tradefor responds:
The largest impediment to mainstream adoption of Bitcoin is volatility. Until volatility can be harnessed, adoption will be slow. It may be necessary to create a synthetic monetary policy in order to solve the volatility issue.
Developer/Webmaster of CryptoHits responds:
I think ease of use and portability are going to be important factors. Recently Vancouver, BC, Canada (and now Toronto too!) came out with a BitCoin ATM. Does Cash to BTC and BTC to Cash. So progress is certainly being made.
Aside from ATM’s having Mobile Apps/Wallets that can transfer BTC to a Point of Sale system will be the next big step.
Ash Moran, Co-Founder of Bitcoin Manchester responds:
The two main obstacles I see are clear tax regulations and better usability for Bitcoin wallets. Bitcoin software is still far too complex for non-technical people to use, and it’s far too easy for people to lose coins.
Max, Co-Founder of Bitcoin Manchester responds:
A few major retailers. It makes smaller stores instantly pay attention. The little guys are the ones who need the financial advantage to succeed, many would not let this slip by if the big players are already taking advantage of the technology.
Alena Vranova, CEO of SatoshiLabs (TREZOR) responds:
Easy access to buying and selling bitcoins, intuitive tools for end-users, security of the wallets (with hardware solutions like the TREZOR) and lots of education and publicity.
The least what we could hope for is some regulatory position on the accountancy issues, so that businesses as well as individuals have a clear idea on how to treat bitcoins in their books and tax sheets.