After 15 years, why is mass adoption of Bitcoin still a challenge?

For everyone who has some knowledge of cryptocurrencies, the volatility of the famous Bitcoin is more than obvious. Even so, it is common that not everyone is familiar with the subject, so if you are one of those people who is interested in investing in Bitcoin, but do not know the reason for such volatility, then you are in the right place. In this section we will briefly explain the reasons why Bitcoin has a volatile price fluctuation . Of course, keep in mind that the fate of Bitcoin is the same as that of many digital currencies that are in the market as a general rule, therefore, it is common to see that, if BTC goes down or up, the others do too. Why is Bitcoin so volatile? 1. The lack of regulation as one of its causes . There is a basic concept in the crypto world that talks about the decentralization of Bitcoin and the fact that it is a digital currency that is not regulated under any government entity; this means that there is no one who can regulate the value it has, nor can they do anything to control its falls or rises. So, this decentralization and lack of control is one of the main reasons why its price is so volatile . However, this little or no regulation is the main attraction for which investors see it as a very attractive electronic currency and, if regulations were to appear, this interest could decrease, therefore, it is a difficult factor to remedy. By the way, if you are looking to invest in cryptocurrencies or see the bitcoin price in real time , we recommend you visit KuCoin, a trusted Exchange platform where you can trade BTC or any other digital currency. Why-Bitcoin-is-So-Volatile-1 2. The magic of supply and demand makes BTC volatile . In case you don't know, Bitcoin was created with a cap supply , limited by an amount determined by its developers, this amount is 21 million tokens, but considering its popularity, its price is greatly influenced by the law of supply and demand. That is, by having a limited amount of tokens and receiving so much demand, its price begins to rise due to the scarcity of tokens . On the contrary, if for some reason big investors start selling their bitcoins and flood the market with them, then their price will start to decline. This volatility driven by supply and demand has its advantages and disadvantages. On the one hand, there is a very good chance that, out of nowhere, its price will drop precipitously, but it will also have an equal chance that its value will skyrocket, so, despite being one of the riskiest investments you can make, many people continue to see it as one of the most interesting market opportunities to invest their money. In any case, for many people this price volatility does not imply a real danger, especially if they already have experience in the area and know how to determine the behavior of cryptocurrencies . 3. It is a technology still in evolution . Bitcoin and cryptocurrency technology are still considered a very young investment platform, since it has barely been launched for a decade , hence not everyone knows their concepts or has confidence in them, this prevents them from being maintained. stable in any situation. Such is the case of influential people in the world who, just by talking wonders or, on the contrary, criticizing these coins, make their price rise through the roof or plummet to the ground respectively. It takes a lot of time, trial and error processes for bitcoin to have a price that resists the onslaught of external factors. 4. World conflicts . This goes hand in hand with the law, with supply and demand and the actions taken by the whales or large investors, since each time the world or global economic outlook is affected by some circumstantial event such as the covid-19 pandemic , crises such as that of containers or wars, sanctions and inflation in powerful countries, make investors alert. So, realizing this, they decide that it is better to move their capital to safer and less volatile investments. Hence they sell their bitcoins, saturate the market and cause its price to decrease. On the contrary, if everything begins to stabilize, they seek to return to these high-risk investments, they buy bitcoin and as demand increases, the value of the currency rises.

When the first film was shown in the cinema, upon seeing the projected locomotive about to run over them, the audience fled the room.

When electricity began to become popular, it garnered critics who showed it as a demon that harmed users and analysts assured that it was a passing fad.

Cartoon of scared people running away from a skull
Although today we cannot live without electricity, in the beginning it was feared.

When contact occurred between Native Americans and European explorers, the locals, who were unaware of “horse” technology, confused men on horses with supernatural creatures. As if the white man, the horse and his modern weapons were all part of the same entity.

Currently, even engineers employed by Google are scared by technological advances in the field of Artificial Intelligence.

When the use and popularity of new technologies expands, fear, uncertainty and doubt usually prevail.

Ignorance and fear go hand in hand because there is always the risk that what inhabits the unknown can harm us.

Only after the unknown becomes known and ordinary is fear lost.

First comes the fear, but then the experimentation begins. The most daring users are those who test the new science before the rest. They know that the adoption of a technology that has only been around for a short time has a greater risk but also has a greater possibility of profit.

For example: starting to save in bitcoin in 2011 when it reached its ATH of USD1 USD and the network was completely experimental, and had rather high risk. Compared to the present, at that time both the hash power and the number of online nodes – which is what provides security to the network – were very low. Furthermore, wallet technology was incipient and difficult. Quality information online was scarce and the size of the network absolutely minuscule. The level of risk and difficulty of using bitcoin was several orders of magnitude higher and more complicated than today.

Also read: Why is Bitcoin so volatile? 4 fundamental reasons

And precisely by going through this complicated path, those who began holding bitcoin at that time have obtained an appreciation measured in dollars of 68,700 times after ten years of holding. (measured in ATH 2021 , reported by Market Times) Was there or will there be another asset in human history that achieves similar growth in its valuation?

Needless to say, the dates I chose to illustrate are handpicked for greater impact, but that does not take away from the overall validity of the thesis. I challenge the reader to come up with similar accounts by taking two dates at random as long as they are about ten years apart.

After the experimentation stage comes the growth stage. Here the network begins to be experienced by more casual users as well. With the growth of users, the value of the network begins to grow exponentially and facilitates the environment for the creation of new markets that feed back to the network.

The Internet brought with it countless new markets where merchants and consumers began to meet, creating virtuous circles of value generation such as Craigslist, Ebay, Mercado Libre, Amazon, AliExpress, Facebook Market, Telegram, etc.

The new markets to be created supported by bitcoin monetary technology will be unimaginably larger, more diverse and of higher quality. Furthermore, it is logical that a market operating on a monetary standard vastly superior to fiat will eventually become a market vastly superior to its fiat-based counterpartGarbage in, garbage out . Fiat comes in, fiat comes out. If solid money enters a market, solid products emerge.

Also read: Is Bitcoin a Financial Asset?

After experimentation, common people lose their fear. Later comes the habituation and paradigm shift, as if the technology in question had always existed. Subsequently, its daily use makes it an everyday thing.

It is worth taking into account the context in which the decision to lose fear is made. Sometimes it doesn’t require much boldness. For example, in the case of highly inflationary economies like Argentina, adaptation is accelerated thanks to the driving force of extreme necessity. No greater courage is required to get rid of the pesos, receiving in exchange anything else that will inevitably be better than the monetary excrement issued by the Argentine Central Bank. (Hence also the popularity of shitcoins in this country.)

Bitcoin is still so young that although there is strong growth in its adoption, we are only in the initial adoption stage. In which only the most daring have decided to make the paradigm leap.

Final note

Mass adoption of bitcoin seems inevitable, but how it will happen and how the masses will interact with the network is uncertain.

If you are interested in reading about how I think the masses will be embraced by bitcoin, let me know and I will cover it in a future article.

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