Bitcoin soared in price over the course of 2017, but we still fumble with fiat currency to buy bits at the bodega. Despite jumping from a price of around $1,000 at the start of the year to $19,343 by December 16, it’s still not possible to walk into most local stores, wave a smartphone and pay with what some hope will be the currency of the future. Bitcoin shot up in value as a speculative investment linked to memes around “hodling,” but it could power an electro-money future independent of big banks.
James Song, founder and CEO of blockchain startup Exsulcoin, tells Inverse that he sees two key issues pushing against mainstream adoption of bitcoin. The first is regulatory: “If we can all agree on what to do about cryptocurrencies, and have them recognized across jurisdictions, it can become like everyday usable money,” Song says.
That’s harder than it seems at first. New York State requires crypto-selling firms to apply for a Bitlicense before operating, and only a very small number of businesses have received clearance. Bangladesh has made cryptocurrencies illegal, while jurisdictions like Myanmar and Sudan have not issued a clear opinion. Other places, like the state of California, clearly note the use of crypto as legal. Bitcoin can rise with clear rules in place, as noted in South Korea’s ongoing clarification leading to rises in the price.
The second hurdle to bitcoin’s adoption is its complexity. “Blockchain and cryptographic keys are fairly simple concepts, but they sound technically complex—sometimes intimidatingly so,” Song says. “But as more people use it, more people will understand how it works, and that will lower this particular hurdle.”
One way of making bitcoin easier to understand is to provide simple solutions with straightforward user interfaces. Crypto wallet Coinbase shot to the top of the iOS App Store download rankings in December 2017, as its easy-to-use design enabled newcomers to get started without asking them to study the complexities of the blockchain. It also enabled them to purchase bitcoin with their credit card or directly with their checking account.
Buying crypto is easier than ever, but the same can’t be said for spending it.
CoinMap lists just 12,499 venues in the world that accept bitcoin. Bitpay handled nearly $2 billion worth of transactions in August 2017 alone, with a point-of-sale system where customers scan a merchant’s QR code with their smartphone wallet app to initiate a transaction. Bitpay has received criticism for requiring users to pay with a BIP-70 compliant wallet, a standard supported by a very small number of firms. The dream of walking into a store and effortlessly spending bitcoin is not quite here — and that assumes the customer wants to spend bitcoin.
“There’s not only going to be fiat but many different types of coins,” JB Lee, head of operations for blockchain network Aelf, tells Inverse. “You cannot say bitcoin is the currency and everyone’s going to use bitcoin, so there should be that translative infrastructure that needs to happen, not only between [cryptocurrencies] but also between fiat.”
Solutions are in development. Bitpay has rolled out support for Bitcoin Cash to its point-of-sale systems, broadening consumer choices. Wallets like TenX are working with existing infrastructure, announcing plans to roll out a Litecoin payment card with a chip. Aelf is working with Bithumb and other exchanges on easy payment solutions, starting with online stores.
“The mass adoption is going to happen first on the online space, where the infrastructure is easier to approach,” Lee says. “In terms of physical person-to-person, yes, it will come, but I think it will take more time and effort.”
The race is on to bring bitcoin to stores. It’s not just crypto in the running, though — other startups are working to make cash spending easier than ever, building on the success of Apple Pay contactless payments and similar products.
“I love [bitcoin’s] technology and I love the concept and being able to have this shared oversight is great,” Laurence Cooke, founder and CEO of payment startup Nanopay, tells Inverse. “[But] you cannot possibly compete with cash today, let alone a future platform like ours that is infinitely more scalable and much cheaper.”
The bodega of the future is about to radically transform, but as the existing cash infrastructure moves into action, crypto will need to work hard to get to the forefront of this revolution.