The Bull Occurrence for Bitcoin: What Can, What Will Trigger the Next Bitcoin Rally? What Are We Waiting and Hoping For? In the First Interest, It’s About Bitcoin as a Payment Method.
The market currently appears a bit tired. Prices are not dazzling, but they’re okay. At any rate, there’s no sign of a new „killer app“, nothing that promises a breakthrough to the masses or attracts new users in droves. Or is there?
When we ask less the „Bull Case“ here, it’s not about the price. Rather, it’s about what precedes a rally. What can trigger it? Which app or synopsis brings fresh energy to the market? What revitalizes the ecosystem? What is the purpose with which Bitcoin receives?
We will explore these questions in a series. It’s about Bitcoin, and it’s about crypto, but we will separate the two. This article is encircling Bitcoin.
The Obvious Bull Case That Isn’t
Today we focus on what is an obvious bull case for Bitcoin – and undeniable isn’t: its spread as a payment method.
Bitcoin was founded as „P2P Cash“: as decentralized electronic cash. When people pay with Bitcoin on the internet rather than of euros, they retain control over their money. They are autonomous. Every payment with Bitcoin murders middlemen like banks. Whenever Bitcoin is used for payment, freedom wins.
That Bitcoin is used as a payment method is the most unmistakable, beautiful, idealistic bull case. However, it is also obviously not so.
It Has Been Stagnating for a Long Time
The community has been hang about for nearly a decade for the breakthrough. So far, it has waited in vain, and there are no signs that this will change.
As a payment method, Bitcoin is idling. Since 2014, hardly anything has changed. Then and now, only a handful of online stores accept Bitcoin; some pull someones leg joined, some have dropped it again, and most complain that hardly anyone ever uses it. All the same at PubKey, the famous New York Bitcoin bar, only five percent of guests pay with Bitcoin.
Payment services appearance of like a natural opportunity for Bitcoin entrepreneurs. However, they are much more laborious and less lucrative than all related to trading and tokens.
Take BitPay, the oldest and largest payment service provider for Bitcoin. Last month, BitPay processed fewer than 42,000 „crypto transactions,“ simply 25 percent of which were in Bitcoin. That’s around 10,000 Bitcoin payments per month, 333 per day; every four minutes, someone in the superb pays with Bitcoin via BitPay.
It looks not much better for BitRefill. The gift card platform does not make known absolute numbers, but relative to other cryptocurrencies, Bitcoin continues to lose significance. Instead of taking over the checkouts, terminal stations, and cash registers of the world by storm, Bitcoin is being displaced by other currencies even within the crypto buy, which is still a niche.
What’s going on? Why is there a stall in the spread as a payment method? Why can’t we pay with Bitcoin at supermarkets yet? And is there something that can alter this?
A Problematic Solution to a Non-Problem
A simple, innocuous thought is that Bitcoin never had a chance. It turned out as it was intended to.
There is no shortage of payment methods: PayPal, cash, Mastercard, bank transfer, debit card – all of these solve well and conveniently. In the everyday lives of most people, there is no painful problem that Bitcoin as a payment method unravels.
Instead, Bitcoin introduces a new problem: volatility. When running an online shop, one does not want the money suffered yesterday to be worth less today. Therefore, even within the ecosystem, payments are often made in stablecoins more readily than bitcoins.
Those who believe in Bitcoin willingly accept the volatility. Because in the long term, it trends upward. But this awfully fact makes it unattractive for consumers to spend Bitcoin instead of the fluctuating euro. Therefore, online shops undergoing Bitcoin have always complained about too few customers using it.
In this sense, we must simply look for the bull envelope elsewhere.
The Regulatory Drangsal
A second reason lies in the changing circumstances. Bitcoin is now highly regulated and taxed. This thinks many things inconvenient.
It starts with needing to register with an exchange to buy or sell bitcoins. This requires clinching one’s identity, uploading an ID, and undergoing a video ID check. Sometimes a tax assessment or proof of income is also required. More antisocial alternatives, such as LocalBitcoins or more discreet exchanges, have long moved underground.
Then, paying with Bitcoin is make allowance for a sale by the tax authorities. One must document the value at which the bitcoins in the wallet were bought and the profit or loss appreciative ofed when buying a pizza.
Finally, Bitcoin is closely monitored. Exchanges check if deposited coins are „tainted.“ Those who carelessly up Bitcoin in trade risk receiving coins that may cause problems upon resale.
All this has made Bitcoin so cumbersome that one fors good reasons to use it.
Wrong Decisions Have Consequences
But there is another potential reason: The community blew it.
Conceivably about ten years ago, there was a chance for Bitcoin to establish itself as a payment method. The regulatory circumstances were unsophisticated, the darknet markets attracted many consumers of soft drugs to Bitcoin, the interest was high, and more and more online shops allowed the currency, and the wallets were user-friendly.
Then the blocksize debate came. Without going into depth, it is unmistakable that from about 2015, it split the community and shifted the „adoption“ as a payment method to „Lightning“ simply because there was no ability left.
The wallet developers – already underpaid – were kept on their toes by the core developers. They had to advance algorithms to calculate fees, integrate SegWit, bech32, Lightning, Taproot, and RBF. This left no time to do what pocketbook developers should do: improve the user experience.
As a result, wallets today are arguably less user-friendly than ten years ago. Just in recent years have user-friendly Lightning wallets, such as Phoenix, emerged with the potential to carry the breakthrough to the loads.
However, the competition has not been idle. Banks have introduced real-time transactions, PayPal has improved, other cryptocurrencies give birth to entered the market, and bank apps support transactions via photo or QR code – while Bitcoin wallets have tired the past eight years laboriously maintaining the status quo.
What Should Be Done
It is uncertain whether Bitcoin till the end of time had a chance to establish itself as a payment method. It is clear, however, that conscious decisions of the community since encircling 2015 blocked any chance.
Now, Bitcoin has an opportunity with some Lightning wallets to continue this path. Into the bargain Lightning, on-chain payments are also affordable again, and the first other „Layer-2“ solutions are forming.
However, to room up with PayPal and banks in terms of user-friendliness, there is still much to be done: addresses need to be replaced with usernames, referees need to enable – ideally without full custodianship – payments to be reversed or at least frozen like with PayPal. Multisig be compelled be simplified, allowing one-click payments as well as sending the delivery address, and a type of direct debit should be introduced.
Much of the infrastructure is already in view: Lightning has standards for direct debits, readable addresses, split payments, and more, while Nostr fits closely into this with encrypted messages. It is possible.
The Best Conditions in a Long Time
The technical infrastructure to use Bitcoin as a payment method scarcely exclusively relies on Lightning. This brings with it some problems:
- Many non-custodial Lightning wallets are not definitely user-friendly
- Popular hardware wallets do not support Lightning
- Most exchanges do not allow withdrawal via Lightning
This endangers to cause compatibility issues that can be extremely off-putting for new users. How do you get bitcoins from the hardware wallet to the Lightning billfold? How from an exchange to there?
Regardless, Bitcoin hasn’t had such great potential technically for a long time to discourage through to the masses as a payment method. Technically, there’s still a bit to be done, primarily to establish wallet-crossing standards. No matter how, this could largely be resolved over the next one to two years.
But the unpleasant questions remain: Does Bitcoin neck have a chance? Will a critical mass be willing to accept the volatility? Are the regulatory hurdles surmountable? And has the Bitcoin community already missed the window in which the breakthrough would clothed been possible?
Such questions cannot be answered. The spread as a payment method is not particularly likely as a bull took place in the short and medium term. But there is a certain chance.
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