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Author Topic: What are the major hurdles you feel BitCoin faces to mainstream acceptance?  (Read 2414 times)
IdeaMan
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August 27, 2011, 05:52:35 PM
 #1

BitCoin certainly has a ways to go before mainstream adoption and acceptance.  We can cite numerous potential reasons for this, but what we actually need to do is determine what the real issues are blocking it and make steps to facilitate the growth of the BitCoin economy into mainstream sectors.

How can we stabilize it as a currency in terms of purchasing value?  What is a realistic estimate for it to stabilize at as a value?  How long do we have to capitalize on our current momentum to stabilize and cement it before the general market forgets about it and moves on?

What can be done to help both online & brick and mortar merchants accept it more widely?  What tools need to exist to flesh out the BitCoin economic ecosystem without imposing the banking models it was design to escape from?

What are the thresholds of acceptance that will propel it's acceptance at a faster rate?  What milestones will cause the non-Bitcoin economy to stand up and take the BitCoin seriously as a contender in the currency competition?  Are there are any other crypto-currency contenders in that space?

Is scalping doing too much damage to the reputation of BitCoin?  Has market volatility scared away too many investors?  If there is a threshold for failure, where is it?

What place will lending institutions hold in the new economy?  Will the lowered acceptance of fees result in increased interest rates for BitCoin loans or piggyback into lower acceptable interest rates from debtors?

What security options does BitCoin need to be as secure and seamless as possible?  What point is the limit for security vs. convenience?

As a community we need to inspect, understand, and address these issues if we hope to see results.  And realize this is just the surface -   BitCoin is for all intents and purposes a newborn, not yet even in it's infancy.  In order to survive in the harsh world of fiat currencies and precious metals and stocks, it's going to need good parenting and a plan.

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August 27, 2011, 06:14:09 PM
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I think the problem long term is that governments will try and destabilise it. They're scared of its potential for tax evasion and money laundering and will use their vast resources to destabilise to currency.
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August 27, 2011, 06:21:30 PM
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I think the problem long term is that governments will try and destabilise it. They're scared of its potential for tax evasion and money laundering and will use their vast resources to destabilise to currency.

I don't think BitCoin is inherently drastically more prone to illegal use than say cash or commodities as a system of wealth transfer, although it is slightly simpler to use illegally.  That being said, the old guard will undoubtedly take steps through various governmental or financial channels to attempt to stop BitCoin as it represents a threat to their existing economic model - wherein they control the economy.

As a community we can do some things to help stem the blood flow from this, and even heal the wound that causes it.

The first is to educate the people we introduce to BitCoin about the ways in which it is similar to cash in that it can be used illegally, but the majority of it's use is for legitimate purposes.  Earlier is better on this one, sine the mainstream media has yet to really latch on to BitCoin as the next big scare for ratings.  The better educated people are (or can easily become) when that happens, the more foolish the old guard will look for trying to badmouth it.

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August 27, 2011, 06:22:14 PM
 #4

I don't ever see mainstream wide adoption really.


You have to have an IQ over 60 really to use bitcoins.  That cuts about 50% of the population out right there.


that is unless maybe you could dumb it down enough to an iZombie app or something.


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August 27, 2011, 06:29:12 PM
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The first is to educate the people we introduce to BitCoin about the ways in which it is similar to cash in that it can be used illegally, but the majority of it's use is for legitimate purposes.

That's the defence that was used for p2p file sharing when it first emerged. People said it could be used legitimately and shouldn't be restricted just because of the illegitimate users. I think Bitcoin probably has more legitimate uses than Napster did (for example) which counts in its favour, but I think there'll be difficulty persuading the public at large that Bitcoin is legitimate especially when the media will undoubtably be whipping up a storm about Bitcoin being used for drug pushers and child pornographers.
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August 27, 2011, 06:40:13 PM
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Lol +1 for being funny.  Picture someone trying to explain Bitcoin to the average guy on the street, it isn't going to work.

I have tried explaining what bitcoin is and how it works to my friends a numerous amount of times, and I find it near impossible, even though I am such a well-spoken and smart person. The only way I can explain bitcoins to anyone that I know is by dumbing it down to the point where it doesn't even seem interesting.

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August 27, 2011, 06:42:55 PM
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I don't ever see mainstream wide adoption really.

If you don't ever see mainstream adoption as happening, why are you interested in BitCoins?

You have to have an IQ over 60 really to use bitcoins.  That cuts about 50% of the population out right there.

This is only the case now - not indefinitely.

that is unless maybe you could dumb it down enough to an iZombie app or something.

I laughed, but this would actually be a huge help to it's adoption.  This goal is probably best served by the open source community developing a standard BitCoin library (let's call it bitCoinLib) for other developers to implement with little or no restriction on it's inclusion in a software project, thereby being available easily on as many platforms as possible.  In this way the BitCoin community can easily spread to anyone with a device that can run software including the bitCoinLib and thereby increase the user base drastically.

The only restrictions I could see for use of bitCoinLib would be open source final products to facilitate transparency, and free final products, excepting BTC fees taken which must be added entirely to the mining pools rewards through the protocol's optional fee system (to match the BitCoin protocol's ideals of lowered fees and costs to users of the currency, one of it's main selling points).

edit history
-fixed a typo interest to interested

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August 27, 2011, 06:46:41 PM
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I don't ever see or hope for a mainstream adoption either. I do hope that it adapts better and gets easier to use for its current users and maybe grow a tad more to stimulate the community. But other than that, I wouldn't mind if everyone didn't know about it.

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IdeaMan
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August 27, 2011, 06:52:18 PM
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I don't ever see or hope for a mainstream adoption either. I do hope that it adapts better and gets easier to use for its current users and maybe grow a tad more to stimulate the community. But other than that, I wouldn't mind if everyone didn't know about it.

The more people who adopt BitCoin, the greater the value.  Therefore it is inherently contradictory to to not hope for mainstream adoption, and want it to appreciate.  As an extension of this logic, everyone knowing about it increases the value the greatest amount, as well as providing incentive for people to create more and better clients for BitCoin use.

So again, why are you interested in BitCoin?

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August 27, 2011, 06:54:23 PM
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I don't ever see or hope for a mainstream adoption either. I do hope that it adapts better and gets easier to use for its current users and maybe grow a tad more to stimulate the community. But other than that, I wouldn't mind if everyone didn't know about it.

The more people who adopt BitCoin, the greater the value.  Therefore it is inherently contradictory to to not hope for mainstream adoption, and want it to appreciate.  As an extension of this logic, everyone knowing about it increases the value the greatest amount, as well as providing incentive for people to create more and better clients for BitCoin use.

So again, why are you interested in BitCoin?

I'm interested in Bitcoin for purchasing with anonymity. Value does not matter to me completely*, keeping my identity hidden behind this computer is.

Edited for mistake*.

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August 27, 2011, 07:02:19 PM
 #11

I think it will always be a niece market to some extent. It's never going to become a mainstream payment method for Joe Public. However, there's still massive opportunity for increased adoption. Right now Bitcoin really is a geeky thing. Nobody outside techie circles has heard of it. It's slowly starting to permeate the mainstream financial news and as press coverage increases, we can expect much more growth as investors with a penchant for high risk / high gain investments put their money into it.
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August 27, 2011, 07:08:10 PM
 #12

I think it will always be a niece market to some extent. It's never going to become a mainstream payment method for Joe Public.

Why do you think this?

However, there's still massive opportunity for increased adoption. Right now Bitcoin really is a geeky thing. Nobody outside techie circles has heard of it.

That's certainly a hurdle, but I don't think it's insurmountable.

It's slowly starting to permeate the mainstream financial news and as press coverage increases, we can expect much more growth as investors with a penchant for high risk / high gain investments put their money into it.

Agreed.  But what indicators point to the this being a finite point before mass adoption?  What prevents BitCoin from becoming a "real" (so to speak) currency?  As more investors show exposure to BitCoin, why would it not eventually reach a critical mass of sorts and cascade into mainstream adoption?

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August 27, 2011, 09:24:58 PM
 #13

And realize this is just the surface

I just had a conversation with someone who runs a consumer-to-consumer used-auto listing service.  

Normally there are all kinds of problems with trust for both sides of the process.  

The seller takes a big risk in letting the potential buyer test drive the car, for instance.  I suggested that bitcoins could be used to help increase the likelihood that the potential buyer returns with the vehicle.  Having an escrow agent, such as BTCrow.com in the middle, for instance would help to protect both parties.

Additionally, showing up with a pocketful of cash to a location of the seller's choosing makes many buyers uneasy.  With bitcoin and a smartphone the buyer needn't carry cash at all.   If everything checks out, the buyer can complete the purchase on-the-spot.

These are two examples of niche uses for bitcoin that aid certain types of commerce.  They are examples that show how Bitcoin can help improve our lives.

These two examples are, to reiterate your statement, "just the surface".

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August 27, 2011, 10:23:49 PM
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Lol +1 for being funny.  Picture someone trying to explain Bitcoin to the average guy on the street, it isn't going to work.

I have tried explaining what bitcoin is and how it works to my friends a numerous amount of times, and I find it near impossible, even though I am such a well-spoken and smart person. The only way I can explain bitcoins to anyone that I know is by dumbing it down to the point where it doesn't even seem interesting.


Yep I get the same puzzled looks.. and the older crowd is like 'but its not money you cant hold it'  - And to other poster I am all for spreading the word , and do so - going to pitch the idea to small business association locally some time soon, but really you don't need mainstream appeal to be successful. To me its a small gamble, always have multiple horses int he race they say...

Look at gold .. 90 to 95% (maybe higher) US citizen has no idea that gold is money, even after this run from 250 to 1900 .. there just isn't wide mainstream appeal, but hey I would say that isn't such a bad thing it has worked out very well for me.  i fell bitcoin may be similar as time goes on.

 Kinda like the apple stock holder arguments to me "i'm up 400%!!!" ..but yeah everything you buy costs 500% more.. you lost, after taxes, well lets not even go there such deep thoughts lol

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August 28, 2011, 01:55:43 AM
 #15

It's very difficult to go from cash to bitcoin.  The "common man" has no patience for this.  Hash, blocks, all this nonsense...normal people simply don't care.

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August 28, 2011, 03:25:36 AM
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Bunch of reasons why it'll struggle for mainstream acceptance (which isn't necessarily to say it'll never get there):

1.  Lack of accessibility.  Any time you want to use it you have to install software and download the whole block-chain.  Thin clients/online wallets may ease this - but going the wallet route just makes it a bit like an amateurish Paypal where you don't get seller protection AND there's a decent chance of the wallet stealing your money.

2.  A (somewhat deserved) reputation for most services being scammers or amateur.  Not a show-stopper and, as more reliable services become available, this will become less of an issue.

3.  Lack of stability in value.  The mainstream doesn't want a currency which has 20%+ swings in value in a day.  This is a bit of a chicken and egg situation - as it becomes more mainstream it'll become more stable.

4.  Difficult to transfer to/from fiat currency without paying hefty margins and/or having lengthy delays.

5.  The perception that anyone can make a currency like bit-coin (see ixcoin etc).  This is a false perception imo (anyone can make a currency but getting it used and having value is nothing like so simple).

Just a few quick thoughts on it. 
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August 28, 2011, 04:30:02 AM
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1.  Lack of accessibility.  Any time you want to use it you have to install software and download the whole block-chain.  Thin clients/online wallets may ease this - but going the wallet route just makes it a bit like an amateurish Paypal where you don't get seller protection AND there's a decent chance of the wallet stealing your money.

For now the best practice solution is to run a full-fledged client on a trusted machine you control physical access to, and remotely VNC to it over the Internet as securely as possible.  While (even perfect) online wallets are a solution, they are inelegant and contrarian to the decentralized/low-overhead goals of the protocol.  After I post, I'll start a thread on using VNC as an alternative near-universal mobile client from a smartphone or laptop.

2.  A (somewhat deserved) reputation for most services being scammers or amateur.  Not a show-stopper and, as more reliable services become available, this will become less of an issue.

This can be simply overcome by creating more legitimate businesses using BTC.  While this isn't a short-term solution, in the long-term it outweighs the scammers in terms of public opinion.  Pushing for immediate growth in the legitimate sector will go far on this front to expedite the process.  Invest in businesses that use BitCoins well and promote them through their affiliate programs.  This is an area we can and should move aggressively on when possible.

3.  Lack of stability in value.  The mainstream doesn't want a currency which has 20%+ swings in value in a day.  This is a bit of a chicken and egg situation - as it becomes more mainstream it'll become more stable.

This problem is will be addressed via distributed bot that acts as a price bloc.  Please read and comment on my thread at:
bitcointalk.org/index.php?topic=39792.msg485421#msg485421

4.  Difficult to transfer to/from fiat currency without paying hefty margins and/or having lengthy delays.

This problem will potentially be self-correcting as more individuals are in a position to trade BitCoins with people they know in real life.  Many BitCoin users now only know of people online to trade them with.

5.  The perception that anyone can make a currency like bit-coin (see ixcoin etc).  This is a false perception imo (anyone can make a currency but getting it used and having value is nothing like so simple).

I'm not sure this is an actual hurdle to BitCoin - there's a strong argument to be made that acceptance of one crypto-currency (at least partially) supports acceptance of all crypto-currencies.

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August 28, 2011, 06:01:02 AM
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1.  Lack of accessibility.  Any time you want to use it you have to install software and download the whole block-chain.  Thin clients/online wallets may ease this - but going the wallet route just makes it a bit like an amateurish Paypal where you don't get seller protection AND there's a decent chance of the wallet stealing your money.

For now the best practice solution is to run a full-fledged client on a trusted machine you control physical access to, and remotely VNC to it over the Internet as securely as possible.  While (even perfect) online wallets are a solution, they are inelegant and contrarian to the decentralized/low-overhead goals of the protocol.  After I post, I'll start a thread on using VNC as an alternative near-universal mobile client from a smartphone or laptop.

2.  A (somewhat deserved) reputation for most services being scammers or amateur.  Not a show-stopper and, as more reliable services become available, this will become less of an issue.

This can be simply overcome by creating more legitimate businesses using BTC.  While this isn't a short-term solution, in the long-term it outweighs the scammers in terms of public opinion.  Pushing for immediate growth in the legitimate sector will go far on this front to expedite the process.  Invest in businesses that use BitCoins well and promote them through their affiliate programs.  This is an area we can and should move aggressively on when possible.

3.  Lack of stability in value.  The mainstream doesn't want a currency which has 20%+ swings in value in a day.  This is a bit of a chicken and egg situation - as it becomes more mainstream it'll become more stable.

This problem is will be addressed via distributed bot that acts as a price bloc.  Please read and comment on my thread at:
bitcointalk.org/index.php?topic=39792.msg485421#msg485421

4.  Difficult to transfer to/from fiat currency without paying hefty margins and/or having lengthy delays.

This problem will potentially be self-correcting as more individuals are in a position to trade BitCoins with people they know in real life.  Many BitCoin users now only know of people online to trade them with.

5.  The perception that anyone can make a currency like bit-coin (see ixcoin etc).  This is a false perception imo (anyone can make a currency but getting it used and having value is nothing like so simple).

I'm not sure this is an actual hurdle to BitCoin - there's a strong argument to be made that acceptance of one crypto-currency (at least partially) supports acceptance of all crypto-currencies.

1.  We're talking about mainstream acceptance.  That's not gonna come if everyone has to:
a) Have an always on computer running VNC or similar on a permanent connection.
b) Have that computer solely used by them - leaving an unencrypted wallet on a running machine used by others wouldn't be smart.
c) Either carry around another device with VNC installed AND internet connectivity or somehow be able to use VNC on other people's machines.

I'm not knocking it as a work-around for some of us - but it's not a mainstream solution.  There ARE mainstream solutions -but what you propose isn't one.

2.  We're in agreement this is an issue - but not one which can be overcome.  To an extent this issue is actually the result of other ones.

3.  Read your thread.  Seems to be suggesting tieing up about 15% of the value of all BTC in existence with zero return - with them only ever being used if BTC totally crashes at which point that US$ could well be significantly devalued.

Plus my point was about stablity - your thread is about guaranteeing some minimum value which would do nothing to encourage stability at higher exchange rates.  Fundamentally you can only prop up a currency's value by taking a loss - I'm gonna go out on a limb here and guess you weren't actually offering to tie up $21m of your own.  Artificial manipulation of bitcoin value by (what would be in effect) some central reserve bank is totally against the whole principles seperating bitcoin from fiat currencies.  The correct way for stability to arrive is by increasing bitcoin trade such that speculation and scams are no longer the main drivers in the market.

4.  I agree in theory.  Right now there's few reasons associated with legitimate businesses to want bitcoins rather than US$ (speculation, trading and Silkroad spring to mind as amongst those few).  For bitcoins to go mainstream there need to be reasons why buying with them is better than with fiat.  There's no real incentive whilst many merchant who take bitcoins are just selling at a prive that's higher than fiat (by the margin they pay to get the BTC straight back into fiat on MtGox).

5.  I agree this isn't much of an issue to you or me - but to the mainstream it's not so obvious why bitcoins can have value when anyone can just make their own similar currency up overnight.
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August 28, 2011, 06:10:53 AM
 #19

Oh - and in the thread you linked re: point 3 you seem to have a fundamental misunderstanding.  You're talking about "price" - whereas I was referring to "value".

To quote your thread:

"As an example, let's say you wanted to stabilize the price (ratio) at 1$:1BTC for all eternity - they would simply place a $21,000,000 bid at 1$ on MtGox.  As a result the price cannot go below 1$."

Your conclusion (price cannot go below $1) is correct - but totally meaningless.  It's VALUE that matters.

And your earlier point that it would stabilize the price at $1:1BTC is just plain wrong.  It would keep the price at or above $1:1.

If everyone else in the world believed bitcoins were worth less than $1 then yes - they'd never trade below $1.  But you'd end up owning every accessible bitcoin with noone willing to buy them back from you: as value requires both a buyer AND a seller (whereas price just needs a seller).  So ultimately you'd achieve the "goal" of bitcoins never falling below $1 - at the cost of you ending up out of pockey by (up to) $21m and holding a wallet full of bitcoins that noone would buy (unless .you dropped your price - but if you did that then you'd not have achieved anything at all).

Value != Price
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August 28, 2011, 06:34:15 AM
 #20

Oh - and in the thread you linked re: point 3 you seem to have a fundamental misunderstanding.  You're talking about "price" - whereas I was referring to "value".

To quote your thread:

"As an example, let's say you wanted to stabilize the price (ratio) at 1$:1BTC for all eternity - they would simply place a $21,000,000 bid at 1$ on MtGox.  As a result the price cannot go below 1$."

Your conclusion (price cannot go below $1) is correct - but totally meaningless.  It's VALUE that matters.

And your earlier point that it would stabilize the price at $1:1BTC is just plain wrong.  It would keep the price at or above $1:1.

If everyone else in the world believed bitcoins were worth less than $1 then yes - they'd never trade below $1.  But you'd end up owning every accessible bitcoin with noone willing to buy them back from you: as value requires both a buyer AND a seller (whereas price just needs a seller).  So ultimately you'd achieve the "goal" of bitcoins never falling below $1 - at the cost of you ending up out of pockey by (up to) $21m and holding a wallet full of bitcoins that noone would buy (unless .you dropped your price - but if you did that then you'd not have achieved anything at all).

Value != Price

Sorry, I should have phrased that better - there is no way to regulate value unless you can regulate the value of all existing currencies with 100% accuracy, and that is probably impossible.

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