Categorized | Brainstorming

Will Bitcoin Eventually Be Used for End User Transactions?

Posted on 17 January 2017 by Andrei

I had a very interesting exchange of comments with a reader who is a bitcoin enthusiast a few days ago. While I’m not a bitcoin/crypto pro, I am reasonably knowledgeable and since I’m a domainer as well, I can’t help but wonder whether bitcoin will eventually become mainstream enough to be used for end user transactions.

Some of the points the reader in question made are quite valid and I do have to admit, using bitcoin would be awesome for several reasons such as:

1) ridiculously low fees and I mean ridiculously low

2) quick payments but of course, one might argue that we already have this with options such as PayPal (… but at much higher fees!)

3) the fact that bitcoin is decentralized and as such, you don’t rely on a third party that might close your account and limit access to your funds such as PayPal (which is notorious for doing just that)

… and so on.

The pros are very, very juicy but on the other hand, there are cons as well and I’d say the main con is represented by the fact that using bitcoin the way it’s supposed to be used is hard. Even for someone reasonably tech-savvy like myself, there’s a bit of a learning process involved. Understanding how bitcoin works, what a wallet is, what the difference between an online wallet and a paper wallet is and so on.

Now put yourself in the position of the average end user, who in most cases barely knows how to accept a push or initiate a transfer.

The likelihood of such people using bitcoin as it’s meant to be used is very, very low.

As such, a need for “middle men” who make the entire process easier arose.

Services such as Coinbase and Blockchain.info make everything a LOT easier. You just sign up for an account and bam, you can start sending and/or receiving bitcoins. The main problem is that by adding a middle man to the mix who might do precisely what PayPal sometimes does (limit access to funds, cause problems and so on), you wouldn’t be using bitcoin the way it was meant to be used.

A tricky situation but I for one can’t possibly envision how end users could start adopting bitcoin unless everything is overly-simplified for them.

Just a topic worth thinking about, perhaps you guys have some feedback on this.

Here are two relevant videos from my YouTube.com/OneMinuteEconomics channel that I think you’ll find useful if you don’t know a lot about bitcoin.

First, one about bitcoin and cryptocurrencies in general:

https://www.youtube.com/watch?v=xSomPDhOAu4

The second one I want to share is about counterparty risk, a layer of risk that gets added with each middle man (as mentioned previously, transactions are made easier by middle men such as Coinbase or Blockchain.info but another layer of risk is added):

https://www.youtube.com/watch?v=U8yMijHJVyk

6 Comments For This Post

  1. Blockchain Says:

    Some service just for BTC will arise just for handling domain escrow.

    I too find the whole process of managing, buying, securing BTC confusing. This is why I don’t use it. Even the popular exchanges clearly weren’t built for user friendliness.

    I correctly predicted that Blockchain was going to be of more interest compared to Bitcoin. Banks and financial companies don’t like BTC but do like Blockchain technology. The applications for Blockchain to beyond the financial sector too.

  2. Julio Maysonet Says:

    I’m a member of a Spanish domain forum and there I have seen some members selling domain names for bitcoins.

    Like everything else times change and it might be something that we all have to learn if we want to make extra money on.

  3. anonymous Says:

    The “net” and email used to be difficult and here we are today. Once this Ponzi scheme called fiat currency implodes and everyone realizes they can’t even access their OWN cash (India, Greece, Venezuela, etc) the only cross border secure HONEST SYSTEM will be bitcoin or one of its cousins like Dash.
    There isn’t even enough gold to fill all of the paper gold that is out there. Corrupt government’s will continue to call systems outside of their control corrupt when most know who the CROOKS ARE. Don’t invest money you cannot afford to lose on ANYTHING. Domains and btc are a perfect match. I offer a 25% discount on domains paid for with btc. You can buy anything on amazon with bitcoin via purse.io and get a discount! People in Venezuela were buying food via Amazon and prime delivery using bitcoin. Wish you were an early adopter in domains??? Here is opportunity #2. There is a finite amount of btc unlike fiat that they just keep printing and printing and printing………….crashhhhhhh
    Cheers!!

  4. anonymous Says:

    Spend some time watching Andreas. He has a good grip on btc and fiat and corrupt governments and their corrupt systems.
    https://youtu.be/6ZCVQHtD2l4

  5. Eric Lyon Says:

    I never really got into Bitcoin or other crypto-currencies. I’m not sure that they aree a practical alternative to a payment processor such as paypal, nor do they provide the security of an escrow service.

  6. Blockchain Says:

    @Eric Lyon – You can use multi-signature and smart contracts with BTC or other coins. However, it is confusing even for tech inclined people.

 
 
Domaining blog recommended by Domaining.comRecommended by DomainState.com  Recommended by NamePros.com

 
 
 
 
  • Top Commentators (Resets Weekly)