The Bitcoin network has been around for over a decade now. So, is it living up to its big promises of disrupting the way we do finance?
Unfortunately, Bitcoin still isn’t the widespread standard international currency that many hoped it would be and the behavior of BTC price is still quite unpredictable. But, it is making solid progress around the globe and gaining adoption. Let’s take a look at how Bitcoin is being adopted by people around the world in 2020, and what patterns we can see for the future.
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Bitcoin adoption across the world
The first thing to notice about Bitcoin adoption in 2020 is how different it is across the world. The types of people using Bitcoin in one country often look very different from the users in another. They also invest in cryptocurrency due to different reasons.
A Statista global survey shows the percentage of Bitcoin adoption around the world. It simply surveyed the percentage of the population of each country that had used or currently owned cryptocurrency. It highlights that countries such as Turkey, Brazil, and Colombia are where Bitcoin and cryptocurrency have the greatest adoption rates among citizens. This is interesting as it’s usually the more developed countries such as the United States and Europe that adopt cutting edge technology more quickly.
It could be because these countries have more of an incentive to adopt Bitcoin. These countries have less stable economies and less trust in their governments, central banks, and currencies. That makes the open and decentralized nature of Bitcoin even more attractive. In more developed countries, the banking and fiat currency systems just don’t have enough wrong with them right now to drive adoption by themselves.
A great example is Venezuela. It’s a country with deep political and economic issues that are making life very difficult for Venezuelan citizens. The South American country is going through one of the worst currency crises that the world has ever seen due to political and economic mismanagement. It’s hard to use the local currency to build and keep wealth. That’s why many Venezuelans are turning to Bitcoin as a way of investing and building a financial future outside of the dysfunctional mainstream financial system. The rate of Bitcoin adoption has been steadily rising in Venezuela due to the relative practicality and stability of Bitcoin over the local currency.
We can expect to see this trend of Bitcoin adoption in more economically and politically troubled countries to continue. It’s where Bitcoin gives the biggest bang for its buck, for now at least.
One of the most important indicators of Bitcoin adoption is the number of merchants and sellers that accept cryptocurrency as payment for goods and services.
Coinmap.org is an open-source record of what places around the world accept crypto. At the time of writing, there are over 16,000 venues that accept cryptocurrency spread all across the world, with hotspots in the US, South America, Singapore, South Korea, and Europe. Again, Bitcoin is picking up speed in Venezuela. It’s expected that more than 10% of retailers will accept Bitcoin by the end of 2020.
The infrastructure is still lagging for Bitcoin and other cryptocurrencies to truly take over the retail world. However, some interesting experiments are going on at larger companies.
Starbucks has partnered with crypto company Bakkt to develop a Bitcoin payment application. It will allow regular people to buy a coffee at Starbucks with Bitcoin. This could be a large-scale proof of concept for Bitcoin as an everyday payment method, and it is a huge step in the right direction for Bitcoin adoption.
Technical roadblocks remain
On the surface, it does seem like Bitcoin adoption hasn’t grown much in the last few years. At least not as much as many of us were expecting. There are some important reasons why.
The most important is the technical constraints that still plague blockchain technology. The simple fact is that the Bitcoin network is still technologically incapable of handling mainstream adoption. So large-scale Bitcoin adoption could right now happen anyway, even if the entire world was on-board (in fact, this could make it even more difficult).
The technical roadblocks include problems like scalability, security, and centralization. Scalability is the inability of the network to operate properly as more and more people start using it. This is a particularly big problem with decentralized networks as network communication overheads become a massive issue when you can’t go through one central point of authority.
Security threats are also a problem. Threats such as the 51% attack are becoming less theoretical and more realistic as the cryptocurrency industry develops. With cheap, rentable hardware now becoming available, the cost to take over a blockchain network temporarily is dropping, making the threat more real.
There’s also the problem of centralization of mining that degrades the legitimacy of the Bitcoin network and the trust that people have in it.
Until these technical problems can be solved, Bitcoin adoption will continue to stutter.
Early adopters are still supporting Bitcoin
While many global citizens are using cryptocurrency for many transactions, Bitcoin is far from reaching mainstream adoption. The vast majority of Bitcoin users are still the early adopters that really believe in the cause.
Dan Larimer explains that this is true for Bitcoin, but also any emerging technology. For example, it’s still not as convenient to use electric cars, but early adopters that believe in the cause still use the product. Adoption is driven more by philosophy than by practicality. These true believers drive the product forward and give support until it develops and start to compete on a practical level.
Bitcoin and blockchain still have these early adopters and supporters in strong numbers. They are supporting, financing and testing the technology and infrastructure in the real world as it develops. Having this rock-solid and global support base of true believers is an incredible sign for Bitcoin adoption in the future.
article by Mary Ann Callahan