The Highest Hurdle for Bitcoin Adoption is Convenience
Bitcoin offers a lot of advantages to the consumer. It can be sent anywhere in the world (almost) for free, making it a currency fit for the Internet Age.
This becomes a tangible benefit for those people who live in the US and have to send money to their families located outside the US.
This is just one of several use cases; however the other side of the consumer picture is that bitcoin has its pitfalls as well.
The question that often comes to the mind is, “what is the barrier that is stopping the widespread adoption of Bitcoin?”
It’s fundamentally an issue of accessibility.
With traditional banks, account holders can go to an ATM and deposit or withdraw cash.
With bitcoin, it’s possible to go to an ATM and exchange cash for bitcoin, though their availability is still relatively scarce.
A consumer with an interest in bitcoin would likely need to purchase them through an online exchange. They would then have to brush up on their knowledge of bitcoin mobile wallets, likely the main way they would manage and purchase goods in the real world.
While a number of high profile online companies are enabling purchases and payments through bitcoin, outside of small-businesses and boutiques, well-known brick-and-mortar retailers aren’t so quick to jump on the bandwagon.
In the US, using bitcoin has also become more difficult as the IRS is of the opinion that Bitcoin can be treated as a property.
Kenneth Chin, at law firm Kramer Levin, expressed his concerns.
He said that if a dollar were spent on bitcoin, and the value increases to two dollars in the next month then theoretically, the second dollar would be dedicated for tax payment if the bitcoin owner wanted to cash out, similar to a capital gains tax.
Along with this hurdle, credit cards and cash are just much simpler to use. Unless a merchant offers discounts for purchases made with bitcoin, it makes little economic sense to pay exchange fees on bitcoins to purchase goods and services when a credit card would suffice.
However, with bitcoin’s unique qualities (and hurdles), come unique solutions to these problems.
Bitcoin ATM providers like Robocoin allow in-person purchases of bitcoins and a few other ATM providers are likewise aiming to expand their presence. Gyft allows for people to purchase gift cards from large-scale national retailers in bitcoin, allowing bitcoin holders to spend them freely.
As for the recording and reporting of capital gains and losses made with bitcoin to the IRS (which is sure to be a pain), an enterprising developer may be spurred to create a bitcoin wallet that solves this issue.