When will most people use Bitcoin, the way they now use computers and cell phones?
When my Aunt Nancy processes her second bitcoin transaction—and does so intentionally— it will signal to me that a lot of our work here is done. But until that time, there is a long way to go to see mainstream Bitcoin adoption. Products and capabilities that are not only drop-dead simple to use, but that also delight the user, will be a requirement. The following graphic helps illustrate the groups of potential Bitcoin adoptees:
Hardcore enthusiasts are using Bitcoin now. They are the early proponents and adopters, as well as the ones doing groundbreaking development to make the blockchain usable in the real world. The enthusiasts tolerate friction and design flaws, because their desire to advance Bitcoin is so strong they will brave landmines to usage along the way. Relatively speaking, this group is miniscule.
The next tranche of adoptees will be those who are tech savvy and motivated to use Bitcoin for a specific need or interest; for example, investments. A desire to invest in bitcoin for speculative reasons has led to occasional adoption among this group, because there has been a strong enough motive that the benefit of engaging in Bitcoin (even temporarily) surpassed the difficulties. This group is also small because its motivation can be intermittent.
Then there is my Aunt Nancy, who has a smartphone, likes Facebook, and comfortably navigates apps and the Internet. She is not technically savvy, has never written a line of code, and finds Bitcoin confusing. This is the main problem: Bitcoin is too difficult to use right now for the average consumer, whose motivation for use does not exceed his or her willingness to deal with friction. And this is most people.
There is also a secondary issue involved in getting my aunt to use Bitcoin. Paying by credit card or cash is pretty easy, and therein lies the challenge with converting the majority of potential adopters. If you live in a developed economy, current forms of payment feel convenient and accessible. So, not only does Bitcoin currently have inherent ease-of-use issues, the existing consumer solution is really not that bad.
A good analogy for the type of hurdle Bitcoin needs to clear is to examine the arrival of the smartphone and mobile apps. Before that, we had feature phones, which we were generally happy with. Then the smart phone showed up. Prior to that, my Aunt Nancy never said, “I need to have a phone where I can download mini-applications that allow me to perform various internet-like tasks without the existence of a keyboard.” If memory serves, what happened was that she saw a friend using an iPhone and said, “Wait…so I just push this logo on your screen and music starts playing?!” And voila, she was using an app without really knowing it!
Bitcoin adoption for people like my aunt largely rests on developers being able to create seamless interactions that quietly do something similar to what the app did. A good example of this is the recent news from Volabit and SatoshiTango, who announced a remittance service between Mexico and Argentina, in which an individual in Argentina can send funds to a relative in Mexico who then receives Mexican pesos. All the actual settling between the companies is done in Bitcoin; the consumer uses Bitcoin to send money and never even knows it.
Compare that to the traditional way of remitting funds, which can be time consuming and incredibly expensive. If a new way of sending funds emerges that is simpler, and costs extraordinarily less, that’s a big deal. This is the type of innovation that is required to change course on the current inertia. The first step is to seed passive but high-value adoption, which will then be used as a springboard for more conscious participation and use of Bitcoin, and eventually…adoption even by my Aunt Nancy.