New Academic Crypto Research Explains How Bitcoin is Set to Go Mainstream
Bitcoin was designed to be the world’s best peer-to-peer form of electronic cash. Bitcoin, as popular as it is, is far from mainstream. It’s not widely accepted. Most people don’t own bitcoin. The vast majority of retailers and customers continue to use credit cards and similar payment methods.
A new report on MDMag.com, however, explains how bitcoin could go mainstream. That report from Eric C. Jansen, ChFC, explains that with a few simple improvements, bitcoin could become “the future of money”.
“Bitcoin will go mainstream,” writes Jansen. “Bitcoin’s mainstream use, the next chapter in the history of money, will potentially create new opportunities for investors regarding start-ups developing related products and services as they grow, go public and merge. Moreover, these opportunities will enable individuals to invest in Bitcoin itself, as a currency.”
Jansen sees bitcoin’s mainstream usage as “the next chapter in the history of money.” We could still be several years away from that goal – but it could be coming. In his report, Jansen explains the steps bitcoin could take to go mainstream.
Three Steps Needed for Bitcoin To Become Mainstream
If bitcoin is to become mainstream, then three main developments will need to take place on the bitcoin network.
1. Bitcoin Needs a Scaling Technology That Enables Faster, Cheaper Transactions
Bitcoin (BTC) has struggled to scale. Fortunately, a number of technological solutions have been proposed – including everything from higher blocksize limits (as we’ve seen with BCH) to off-chain scaling solutions like Lightning Network.
So far, bitcoin has not yet adequately scaled. The community is divided in terms of how to scale the protocol. Bitcoin will die without scaling. Nobody wants to use a network that processes 7 transactions per second while waiting 10 to 30 minutes for a transaction to be confirmed. If bitcoin is truly to become a usable, everyday, digital currency, then it needs to find a technology that enables faster, less expensive transactions.
Of course, others disagree with Jansen and claim bitcoin doesn’t need to scale: they claim bitcoin, contrary to the Satoshi Nakamoto whitepaper, is not designed to function like an everyday transaction protocol. Instead, it’s supposed to be like digital gold: it’s hard and expensive to transfer but acts as a secure, long-term form of wealth storage.
Bitcoin needs to develop an effective scaling solution if it wants to go mainstream. Visa processes more than 24,000 transactions per second and 150 million transactions per day. Bitcoin can handle as few as 3 or 4 transactions per second. We can do better.
2. Quantum Leaps in Convenience
Jansen also believes that bitcoin needs to undergo “quantum leaps in convenience” if it’s going to be successful. We already have plenty of convenient payment technologies, including credit cards, debit cards, mobile payment wallets, and more. Bitcoin needs to compete with all of these. We need better payment apps in the crypto field. When crypto apps become as usable as a credit card, debit card, or traditional mobile payment app, bitcoin stands a better chance of becoming mainstream.
3. Public Investment Vehicles
Bitcoin also needs public investment vehicles to go mainstream. In the eyes of Jansen, bitcoin needs traditional financial institutions to start participating in the bitcoin market.
“Currently, the only way to invest in various amply venture-funded startup firms developing Bitcoin applications is through ownership of private equity in related technology. Nor does there exist any public exchange for investing in Bitcoin as a currency, as investors do on FOREX, investing in the rise and fall in dollars, pounds, Euros, rubles, etc. against each other. But a venture is in the works to serve this and other Bitcoin functions, including transactions.”
Jansen mentions the potential of Bakkt, for example, which was founded with the goal of creating a bitcoin on-ramp for investors, merchants, and consumers. Bakkt is a subsidiary of Intercontinental Exchange (ICE), the company that owns the New York Stock Exchange. Bakkt is also partnered with Microsoft and Starbucks, among others. If any project has the potential to make bitcoin mainstream, it’s Bakkt.
The involvement of IC could help clear regulatory hurdles from the path of institutional bitcoin investments. It could pave the way for a much-anticipated bitcoin ETF, for example.
In fact, we could have a bitcoin ETF approved before the end of September 2018. The SEC is currently deliberating on whether or not to approve a number of bitcoin ETFs. One ETF is expected to be approved, denied, or delayed before September 30, 2018, and some analysts believe that ETF (the VanEck SolidX Bitcoin Trust ETF) has real potential of becoming the world’s first approved bitcoin ETF.
Jansen also mentions promising developments with regulatory frameworks worldwide. Japan, South Korea, Malta, and Switzerland, for example, have all adopted regulations for crypto and blockchain. This has helped companies move to these jurisdictions for tax benefits. Ethereum, for example, was founded and developed in Canada but the Ethereum Foundation is based in Switzerland due to clearer crypto regulations. As more and more countries develop crypto regulations, it puts pressure on other countries – including the United States – to develop regulations of their own.
Jansen is the founder, president, and chief investment officer of registered investment advisor AspenCross Wealth Management (AWM). The company provides bitcoin and crypto educational services to its retail clients. In his article on MDMag, Jansen outlines three crucial developments that need to occur if bitcoin is to go mainstream.
Yes, bitcoin has some big hurdles to cross if it’s going to go mainstream – but the world’s largest cryptocurrency has grown by leaps and bounds since launching in 2009, and it shows no signs of slowing down today.