A lot of people own Bitcoin right now, but not everybody. Over the past decade, this cryptocurrency has been gradually gaining traction in financial markets and various institutions. Many countries have been exploring Bitcoin’s remarkable potentials, including quick, accessible, and cheaper payment systems, borderless money transfers, and more.
While there’s already a long list of things you can buy and activities you can try with BTC, its exceptional uses haven’t reached every part of the world yet. To achieve widespread Bitcoin adoption, there are critical factors that must be carefully examined and considered. But before we dive deeper into some of those key drivers, let’s take a look at the status of Bitcoin adoption today.
The Bitcoin adoption rate in 2020
We’re slowly shifting towards a digital world where paperless transactions are the new normal—including fiat money turned digital currencies and cryptocurrencies like Bitcoin. Cryptocurrencies are becoming more popular today and many people are trying their hands at this ingenious form of money.
During Bitcoin’s early years, it received a lot of feedback from different industries and jurisdictions. Some were open to the idea, but others found it challenging to grasp and consider as an asset for long-term use. After more than a decade, people in various countries are slowly accepting Bitcoin’s powerful applications, hence, the probable growth in Bitcoin adoption rate.
Recent data from Statista shows the prevalence of cryptocurrency ownership in different parts of the world. Among the top countries that own and utilize Bitcoin and other digital currencies for remittances and other payment transactions include Nigeria, Vietnam, and South Africa, to name a few.
Let’s take a look at some industries and businesses that accept BTC as payment as an example. Major companies from entertainment and sports, automotive, food and beverages, technology, banking and finance, and other industries are starting to accept Bitcoin as payment for their products and services.
From plane tickets and hotel accommodations to pizza, luxury cars, and even a trip to space—you’d be surprised to discover the things you can do with Bitcoin. There are also thousands of cryptocurrency exchanges and marketplaces emerging online. This goes to show that there’s a big chunk of the world’s population that realizes the true power behind Bitcoin.
Key drivers for Bitcoin’s mass adoption
For the Bitcoin adoption curve to go even higher, there are some driving factors to consider. Let’s take a look at what some of these are.
1. Legal and regulatory concerns
With Bitcoin’s unique features, it’s becoming an effective means to reach the unbanked and underbanked population. However, this revolutionary goal is still hindered by some legal and regulatory issues that vary depending on the jurisdiction.
BTC has a decentralized nature, but the countries’ government and central banks still have authority over the legalization of cryptocurrency assets. While it’s becoming more widely accepted in the biggest cities and nations, some remain skeptical. This is why a country’s central bank or financial institution plays a significant role in widespread Bitcoin adoption.
Countries like Estonia, Japan, Singapore, Germany, Switzerland, and the United Kingdom are just some of the many Bitcoin-friendly countries where people can freely hold and spend their BTC. However, there are countries like Saudi Arabia, Qatar, and others that ban Bitcoin within their borders.
2. Utilitarian value
Making payments, transferring money, and engaging in market investments are just some of the uses of Bitcoin. Even today, no one can say for sure whether or not this dominant cryptocurrency can or will replace government-issued money in the future.
For example, transferring money with Bitcoin is a lot cheaper and faster compared to its fiat counterpart. On the flip side, there are still some limitations to making Bitcoin transactions, especially in countries where traditional banks and other money remittance companies are still the primary means of remittances.
Since BTC is not globally accepted yet as a payment method, direct payments and purchases will still be limited.
3. Technological capacity
Bitcoin is a digital currency and it works and operates through powerful technology. The process of acquiring it—Bitcoin mining—requires high-power equipment, a reliable Internet connection, massive digital storage space, and high electrical energy levels. These requirements have been an issue in some countries, especially the spike in energy consumption due to mining.
Besides mining, having access to Bitcoin can seem challenging and complicated for some people. Buying BTC, holding, and spending it requires a smartphone or a laptop that can connect to the Internet. While a good percentage of the population today has gadgets and other digital devices, connecting to the Internet is among the other challenges to deal with.
Not all parts of the world have a fast, stable, and reliable Internet connection. Some developing countries are dealing with the Internet’s expensive cost and unreliable connectivity. This limited connection to the web can be a bottleneck to Bitcoin’s mass adoption.
4. Bitcoin awareness
For Bitcoin to reach every part of the world, people must be familiar with it and how it works. One way to achieve this is through cryptocurrency education that can be shared through social networks. The communities can increase Bitcoin adoption and awareness through word-of-mouth conversations or various social media platforms.
Bitcoin still has limitations today, but as we gradually transition to a digital world, there might be a possibility that cryptocurrencies will eventually be one of the new reasonable financial means. While there are still regulations and technical challenges for Bitcoin, its adoption rate is rising.
There may still be setbacks and challenges for Bitcoin before it reaches mass adoption. Still, once people worldwide explore and experience its remarkable uses, there’s no doubt that this leading digital asset will be known and utilized for revolutionary functions in finance and other industries.