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The amount of active bitcoin wallets and the number of daily transactions have increased significantly over the past year, but, still, most people have never used bitcoin (nor have plans to, as per a recent Goldman Sachs survey).
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While the bitcoin adoption curve is arguably better than that for the Internet, it is slower than that for cell phones. The Internet was under the radar for years and didn’t really take off until a network started to develop and the network effect kicked in.
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Cell phone adoption was quicker and steeper, largely because a new network of users wasn’t needed. Cell phones, from the beginning, were interoperable with legacy telecom rails (ie landlines).
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To date, the bitcoin industry has been focused on creating a new, distributed network for applications like mining, storage, exchange and commerce.
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Arguably, it has fallen short in its efforts to enable bitcoin to be spent like sovereign money. Not one of the top 100 global merchants accepts bitcoin. In fact, according to CoinDesk’s most recent State of Bitcoin report, 100,000 merchants accept payment in bitcoin, which is just 0.3% of the number that accept payment by credit card.
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The rate of merchant acquisition is not increasing rapidly, despite the extremely small baseline costs associated and the number of funded merchant processors, such as Coinbase and BitPay, pursuing them.
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Without the ability to spend bitcoins at most merchants, it will never reach mass adoption as a currency. American Express, Discover Card and PayPal each still battle the perception of their lack of merchant acceptance, despite being accepted at 100 to 250 times the number of merchants as bitcoin.
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The reality is, 99.9% of the world’s population does not own bitcoin and why should they? You simply can’t spend it everywhere you can spend money today.
