Bitcoin may yet see mass adoption, but it’s probably not going to be branded as such even if it does occur. Bitcoin will be everywhere, but most people won’t know it. It will, indeed, be the Internet of Money.
The Other Way Bitcoin Can Succeed
The way that Bitcoin and other cryptocurrencies will begin to take over the money system is by playing to their strengths. Despite everything, cryptocurrencies, including things like Ripple, are much cheaper methods of moving value across borders or not.
There’s some reason to be concerned about government-backed stablecoins and other potential innovations on the part of central banks (commonly called CBDCs or central bank digital currencies). It’s possible that a lot of the advantages offered by crypto could simply be usurped by the same people currently issuing fiat currency. But, does that necessarily mean that Bitcoin won’t stand a chance?
Bitcoin will likely thrive for the same reason that it does now, people want an alternative to the traditional banking system. Especially those locked out of it, which wouldn’t change much as a result of CBDCs.
J.P. Koning recently wrote in CoinDesk about an innovative payment solutions that will use Lightning Network as the backbone. Koning writes:
A bitcoin payment is special. The bitcoin network is open to everyone, or censorship resistant. It allows for pseudonymous usage. And it provides what Satoshi Nakamoto described as non-reversible digital transfers; like cash, once the stuff is spent, the economic relationship between payer and payee is severed.
The payment application that Koning spoke of is called Strike. Strike uses the Lightning Network to relay fiat transactions. Therefore, people can pay and be paid in Bitcoin without ever knowing it.
Can’t Fight The Inevitable
Bitcoin, of course, won’t be the only cryptocurrency facilitating these types of transactions. Other blockchains, and things like stablecoins, will come into play as well. It’s easy to foresee major payment providers like Western Union eventually settling their transactions using cryptocurrency.
Rather than using cryptocurrency directly, the masses may first come into contact with things like Bitcoin indirectly. While a number of merchant payment processors exist to help businesses get on with accepting cryptocurrency, payment systems will likely emerge that do the opposite: settle fiat transactions using the blockchain.
Especially in the case of merchants, a number of positives could emerge. For one thing, faster settlement would be possible. Some merchants wait up to 90 days to eventually receive the money spent on various cards in their establishments. Using cryptocurrency as a base layer, things could be settled faster. Instant settlement is a primary feature of Bitcoin and other cryptocurrencies.
One of the reasons for slow settlement in existing systems is the potential for chargebacks. These would have to be accommodated under this system, but if Bitcoin itself were adopted, they could be eliminated. That’s not say that customers can’t get refunds under a cryptosystem, but just like cash, you can’t just say it never happened.
Bitcoin’s adoption curve will either be at the popular level, or it will be behind the scenes. Right now, it’s looking like the latter.
One question is whether people will even know that they’re using Bitcoin-powered systems. Will it become a point of pride to write “powered by Bitcoin” on product web pages?
Whatever happens, Bitcoin adoption is inevitable.