Gateways for Adoption
Realistically, cryptocurrencies need to evolve as a useful utility to provide value other than simply as an investment asset. Developers in the blockchain ecosystem are working to achieve this with projects currently underway and growing exponentially. Solutions that deal with intense volatility, lack of understanding, ease of use, and security will benefit all involved. Rest assured that entrepreneurs in almost every industry are keeping a sharp eye on developments from the crypto world.
Payment Options such as the Lightning Network will use payment channels in a system built on top of Bitcoin that allow users to transact directly and instantaneously. The system tracks payments between users while avoiding interactions with the blockchain for each and every transaction. The intent is to reduce transaction fees by keeping them off the main network. Lightning Network is a system of smart contracts that allows fast, cheap, direct payment between two parties with no user effort. While still trustless, the system will ensure that funds reach their destination or issue a refund if the transaction fails. It will make tiny payments that are settled instantly a reality while improving privacy and keeping fees low.
Retail Acceptance by big businesses has the power to push mass adoption. Development of payment options as described above offers a pathway to large-scale acceptance and is likely to be one of the strongest indications that will spur widespread use. Retailers that adopt such options early will be seen as being ahead of the tech-curve by a growing number of Millennials that already embrace cryptocurrency. Imagine if Amazon began accepting bitcoin, mass adoption would follow suit quickly.
Online Gaming is a huge industry worth well over $100B and could provide a powerful push toward mass adoption. Millions of people engage in gaming activities that have a value which can be stored as a cryptocurrency, and many have used digital currency in games for decades. Millennials transitioning from gaming currencies to a cryptocurrency would be effortless and barely noticed. The possibility for gamers to earn an actual income through gaming participation would send millions more into the space. Monetizing game activity is an area with endless possibility.
Online Gambling is another huge industry that already offers online bitcoin gambling platforms that are extremely lucrative. The fact that cryptocurrency and blockchain gambling minimizes fraud by providing transparency and promotes fairness with blockchain technology is not lost on gamblers. Should everything from slots to sports gambling end up migrating to digital formats, mass adoption would get a significant boost.
Social Media platforms integrating the blockchain technology is almost a certainty. The ability to increase privacy by controlling one’s social engagements recorded on the blockchain opens the door for some interesting possibilities. There are numerous ICO projects exploring the options already, including the social media giants. Adoption and use by any major social platform would most definitely light a fire under cryptocurrency.
Medical and Government Integration has already begun with counties and the State of Ohio recently announcing their acceptance of bitcoin for payment of taxes. It is feasible that both medical and government institutions currently using vastly outdated systems could implement blockchain technology far quicker and cheaper. Imagine the blockchain utilized by any physician or facility in the world to instantly, securely, and privately access a patient’s medical history. Imagine the increased efficiency of paying taxes, fines, fees, parking tickets, etc. using cryptocurrency. These scenarios would spur mass adoption on a huge scale.
Network Effect
This level of innovation takes time to gain traction and while the paths taken might vary, the result will be the same. Some believe cryptocurrency has the ability to reduce the scope of governance, promote global economic activity, or upgrade the economic infrastructure. All are possibilities, but it seems more likely the same network effect that has given Facebook, Twitter, Amazon or Apple such unshakable presence could do the same for Bitcoin.
If a system needs mass adoption before becoming useful, it will never get it. Users today want instant gratification and to survive, a utility that does not depend on mass adoption has to be offered initially. Bitcoin has ushered in new technology spurring innovation for higher levels of efficiency that are not being ignored. Support from a major player like Amazon or Wal-Mart could open a tidal wave of mass adoption, as could release of the next “killer crypto app” that people find fun or useful.
Picks and Shovels
Investment without actually buying cryptocurrency at all is a possibility. Developers and entrepreneurs are working on innovative uses for Bitcoin’s underlying technology in all kinds of industries. The “pick and shovel” strategy is being employed by many. This strategy is based on the 1800’s Gold Rush prospectors’ need to buy a pick and shovel to be able to mine for gold. While there was no guarantee a prospector would find gold, the companies that sold picks and shovels made a killing.
Just as the Internet is now considered an essential tool by most people, Bitcoin’s technology may prove to be a similar evolutionary tool if one day everyone is using some form of it. Those who provide the necessary support platforms and services stand to benefit greatly, without the risk of investing in Bitcoin itself.