Cryptocurrencies are a decentralized, electronically held and created medium of exchange. The first and most popular crypto is of course, bitcoin. Bitcoin are created through a process called “mining” where individual miners confirm transactions and publish them in blocks to the general ledger. The miners are then rewarded for publishing blocks with bitcoin. These bitcoin then make their way into the virtual economy. The technology has incredible benefits such as low- to no transaction fees and the protocol eliminates the need for a third party to prevent double spending ( a problem with other digital currencies) .
However, Bitcoin has become the center of media attention not for its innovative technology but for talk of the need for regulation, money laundering, and theoretical attacks from collectives of miners.
In spite of the negative media attention bitcoin is being accepted at a growing number of business including Overstock.com, NewEgg, and Shopify. In other words, bitcoin has never been easier to use. Businesses like LocalBitcoin have facilitated person to person transfers by allowing users to rate sellers, set up in-person meetings, and create escrow transactions. Coinbase has been praised by some as the most user friendly exchange/ wallet host. These networks that have facilitated buying and selling, making transactions in virtual currencies fairly safe for the casual users that don’t view the crypto as an investment. Although cold storage and bitcoin safes are becoming more popular, users that buy and spend small amounts of bitcoin are fairly safe from even the most common risks associated with the btc.
So why isn’t this protocol, with its well documented benefits, seen as a flash in the pan or a bubble that could burst at any moment? The short answer: bitcoin users.
The two biggest obstacles preventing the casual internet user from dabbling in bitcoin are the following statements:
1) “The Fed is afraid of bitcoin”: Normal people do not listen to people that EVER talk about The Fed. There is maybe a modicum of truth to this statement. Bitcoin could be used as an alternative to paper currency in the same way that credit and debit cards are today. In May of this year Marc Andreesen described a scenario in which consumers would be able to use bitcoin at Target in his article for the Washington Post. His optimistic yet tempered vision for the future of bitcoin is the type of contribution new users need to push them towards buying a satoshi or two. ( satoshi is the name given to one millionth of a bitcoin). Instead conspiracy blogs tell users that paper currency will be gone the next year. Nearly one-third of the Americans are either unbanked or underbanked, meaning these individuals rely almost exclusively on cash. This fact and countless others are ignored by bitcoin users, making the very useful technology seem, to some, as the passion of the fringe.
2) ” Well first I’ll have to explain how it works” Consumers have many reasons to be a little bit wary of cryptos, as they would be with any other new technology. However, many reasonable people are unreasonably resistant to even examining bitcoin or any other alt coins (ex. Dogecoin Lytecoin). One reason is the way that the conversation around the technology has been approached. Asking someone what bitcoin is if they are a user (or worse miner) will inevitably lead to a lengthy explanation involving talk of hashes, nonces, and ASICS when all you wanted was the basics. People say there is no elevator speech for bitcoin. The truth is, there is. No one knows how their credit card works and yet somehow even the dimmest humans have managed to run up credit card debt all over the world. So why aren’t these same people investing in bundles of bitcoin? Because it sounds so fucking complicated. People that are really knowledgeable about the benefits of bitcoin might tell potential users about the countless advantages, particularly to small business and the underbanked ( very important benefits but outside the scope of this blogpost). Instead those with a little curiosity have it stamped out by an overload of information.
The takeaway here being that bitcoin is very interesting but no one knows what it could or will become. No body does and anyone that claims otherwise is a liar. A terrible liar. Feel free to play.
Scotch & Fodder 