If you spend time online, you’ve probably already been exposed to the Gospel of Bitcoin. Proponents say that this cryptocurrency will replace the traditional currencies used around the world due to its secure nature and lack of centralization. Unfortunately, the real outlook for the currency isn’t nearly so bright.
In fact, it’s rather hard to picture Bitcoin ever reaching the status of a major currency. Below are just three of the reasons why Bitcoin is unlikely to ever bridge that gap and become anything more than a niche currency for power user.
Government Doesn’t Like It
Perhaps the biggest obstacle towards Bitcoin being accepted as an actual currency is governments. While the cryptocurrency is generally lauded as a way past the centralization of current financial markets, the fact remains that governments are still the biggest entities that have a say in what is and is not legal tender.
So long as governments refuse to do business in Bitcoin, the currency will be left on the periphery. Governments around the world currently refuse to take Bitcoin for that most basic of civic costs, taxes. If the coin isn’t legal tender there, it’s not going to make it through most of the other major hurdles.
Too Much Competition
There’s also too much competition in the world of cryptocurrency. Is Bitcoin the best-known name? Of course, but that doesn’t mean that it’s the only name out there. It’s becoming harder for Bitcoin to get a foothold in the public consciousness as alternatives develop.
Even the current split in Bitcoin is playing havoc with the acceptability of the currency, as people are trying to decide what constitutes the “true” Bitcoin and which currencies are really acceptable. If there’s not enough public faith in the currency, it won’t be able to move forward. So long as alternatives are manufactured, Bitcoin will never get enough of a market share to really inspire public faith.
The biggest block towards Bitcoin becoming a currency is, oddly enough, its biggest proponents. Those early investors in Bitcoin aren’t really spending their coins but are rather hoarding them as the value goes up. While this might be a fantastic investment strategy, it doesn’t do much to help the cryptocurrency cross into daily use.
The best way for Bitcoin to get into the public mindset is for people to use it – something that’s just not happening. As long as the current trend continues, Bitcoin will continue to act more like a commodity than a currency. While this might be helpful for those who got in early, it might help to sound the death knell of cryptocurrency as a whole.
What does the future hold for Bitcoin? At the moment, it doesn’t look particularly pleasant. Boosters of the coin might believe in its message and purpose but the market simply isn’t following along.
The current issues with liquidity, acceptance, and competition make it hard to see Bitcoin as ever having a future as a real currency. Something major will have to change if cryptocurrencies will ever make it our of their current niche state.