Where On Earth Is The Bitcoin Revolution?
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Summary:
Although Bitcoin and blockchain technology were meant to revolutionize the monetary ecosphere, to date, it has still not fulfilled its promise of mass adoption to compete with existing fiat currency. That being said, some metrics point to it eventually becoming much more mainstream. However, there are several headwinds that Bitcoin must overcome before it can truly be considered a mainstream currency.
Bitcoin was once something new and novel that the majority of people didn’t understand but were steeped in curiosity about what it might represent. Many of the early Bitcoin buyers and investors were what some would call Bitcoin or crypto “evangelists.” They were convinced that Bitcoin would revolutionize how we utilize and think about money around the globe. These days, Bitcoin is much more well-known and more widely traded, but it still hasn’t lived up to its original message of mass adoption worldwide. So what happened to the “Bitcoin Revolution,” and is it dead? Let’s analyze below.
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A brief history of Bitcoin
Bitcoin was introduced to the world in 2008 as the first decentralized digital currency without a central bank or single administrator. It could be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries. Bitcoin would also have a finite supply that would dwindle every few years until there was no more Bitcoin to “mine.” Every Bitcoin transaction would be available for everyone to see and verify on the public ledger.
Bitcoin offered two things: a currency that was completely out of the control of the traditional central banking system and a currency that was impossible to inflate by printing more and thus was not prone to traditional inflation. For countries like Argentina, in which inflation is a multigenerational problem, it was a very attractive concept.
Bitcoin also promised the following attributes.
| Feature | Description |
| Decentralization | Unlike traditional currencies controlled by governments and central banks, Bitcoin operates on a decentralized network of computers. This means no single entity has control over the currency. |
| Transparency | All Bitcoin transactions are recorded on a public ledger called the blockchain. Anyone can view these transactions, ensuring transparency in the system. |
| Security | Bitcoin transactions are secured by cryptographic algorithms, making them resistant to fraud and hacking. |
| Limited Supply | There will only ever be 21 million Bitcoins. This scarcity is built into the code of Bitcoin itself and contrasts with traditional fiat currencies, which central banks can print in unlimited quantities. |
| Cross-Border Transactions | Bitcoin can be sent and received anywhere in the world, and transactions can be completed faster and often with lower fees than traditional banking systems or money transfer services. |
| Financial Inclusion | Bitcoin has the potential to offer financial services to people without access to traditional banking systems, especially in underbanked regions. |
| Potential for Smart Contracts | While more associated with Ethereum, the concept of smart contracts (self-executing contracts with the terms directly written into code) can also be implemented on the Bitcoin blockchain. |
Where is Bitcoin now?
Although Bitcoin has met several of these, the mass adoption of Bitcoin is still a long way off. At the time of this writing, Bitcoin has acted as a store of value and a digital asset to speculate on. For the most part, Bitcoin is something that speculators trade on a trading platform, with whatever trading strategy they see fit. Does this mean Bitcoin is going to stay on this path?
Carlos Perez released a paper in 2002 titled “Technological Revolutions and Financial Capital.” He listed 35 different phases of breakthrough technology and the typical pattern it follows:
| Irruption Phase | Initial interest in the new technology amidst stagnation and turmoil. |
| Frenzy Phase | Speculation dominates headlines, and exploration of use cases intensifies. |
| Turning Point | Occurs after the Frenzy Phase bubble burst, characterized by increased regulatory involvement and societal sectors’ participation. |
| Synergy Phase | Leverages investments and infrastructure progress into economies of scale expansion. |
| Maturity Phase | The technology’s limitations lead to stagnation and turmoil. |
Bitcoin does not follow this pattern exactly, as it’s up for debate if the usage of fiat currency has really reached a stagnation point. True, there have been plenty of issues with inflation, and some would also point to the domination of the U.S. dollar in the international monetary system. However, many believe that Bitcoin has reached a turning point, as regulatory involvement has increased and institutional investors are starting to get involved.
Countries that have normalized Bitcoin
El Salvador
El Salvador made history by being the first country in the world (and currently only one of two) to accept Bitcoin as legal tender. The foundation of this change lay in the election of President Bukele, who has made some unconventional decisions. So, how has Bitcoin gone in El Salvador?
In reality, the adoption of Bitcoin rallied a slew of crypto entrepreneurs and Bitcoin enthusiasts to El Salvador, a country that never had any sort of budding tech industry before. However, for a country that owes debt priced in U.S. dollars and is supported by the IMF, Bitcoin’s volatility and lack of widespread acceptance as legal tender have raised eyebrows, to say the least. El Salvador’s Bitcoin experiment hasn’t produced much, but time will tell if it was worthwhile.
Central African Republic (Currently not in use)
According to the Human Development Index, the Central African Republic is the second poorest country in the world, with 79% of the population living in poverty. In 2022, the CAR went ahead and adopted Bitcoin as the legal tender of choice.
The Central African Republic’s population had little to no experience with “crypto,” and thus, the utilization of the majority of the population was very low. However, there was still promise with investors taking advantage of “Sango,” which, in essence, is the tokenization of land and natural resources in the CAR. Due to Russia’s invasion of Ukraine, the CAR and the Kremlin’s cozy relationship led to the fear that the CAR’s adoption of Bitcoin was politically motivated to help Russia avoid sanctions. Thus, in 2023, the decision was reversed, and Bitcoin is no longer a legal tender in the CAR.
So, what’s the future of Bitcoin?
Let’s be honest — with only two countries accepting Bitcoin as legal tender and one of them reversing the decision, the idea that multiple countries will now start accepting Bitcoin is probably not realistic. That doesn’t mean Bitcoin isn’t moving towards mass adoption, but a few things need to happen.
Regulation
Regulation is one of the key factors in helping Bitcoin go more mainstream. Currently, there is zero regulation in the crypto industry, but that’s starting to change. When the SEC filed suit against Coinbase, stipulating that they were trading securities without a license, they said, “all cryptocurrencies EXCEPT BTC.”
The U.S. Treasury Department’s Financial Stability Oversight Council identified three major regulatory gaps for cryptocurrency in a 2022 report. These include the absence of rules for spot markets, the potential for regulatory arbitrage, and the centralized nature of crypto services.
Pro Tip
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Institutional adoption and retail investment
The mass adoption by institutional investors that then create retail investment products with Bitcoin has still not happened. Although many institutions have started investing in cryptocurrency themselves, there are still no mainstream investment products. But that could change soon.
The catalyst for everything will be the regulatory approval of a BTC ETF (a Bitcoin exchange-traded fund). As of this writing, there has been a perpetual delay in the SEC’s approval of a Bitcoin ETF. If this approval eventually happens, the floodgates of institutional investors offering Bitcoin products will likely open. For now, you can look to invest in companies that invest in crypto.
What do the experts say?
We spoke to three experts about how they felt about the mass adoption of Bitcoin and here is what they had to say.
Sam Farao, CEO of Coinweb
“Bitcoin has indeed become more of a store of value like gold, primarily due to its volatility and scalability issues. However, with ongoing developments like Layer 2 solutions and increasing institutional adoption, it might gradually find use as a medium of exchange for regular purchases in the future. It is an evolving space, and broader adoption for purchases could still be on the horizon.”
Garrett Yamasaki, CEO of WeLoveDoodles
“It’s essential to understand Bitcoin’s current role. Just as gold is a store of value rather than a currency used for daily transactions, Bitcoin serves a similar purpose in the digital realm. It’s a hedge against economic uncertainties and a store of value, but there are better tools for everyday transactions. As the crypto landscape evolves, we might see other cryptocurrencies take the lead in daily transactions while Bitcoin retains its ‘digital gold’ status.”
Dan Barrett, co-founder of Pacific Precious Metals
“While Bitcoin’s primary role has evolved into a store of value akin to gold, its potential for widespread use in everyday purchases remains. One compelling reason for optimism is the growing adoption of cryptocurrencies by major companies and financial institutions. A recent survey by Nickel Digital Asset Management found that 82% of institutional investors expect to increase their exposure to crypto and digital assets by 2023. This is up from 63% in 2021. As more businesses and institutions integrate Bitcoin into their operations and payment systems, the path toward its use as a viable medium of exchange becomes clearer.”
It may take time, but the groundwork is being laid for increased Bitcoin utility beyond a store of value. - Dan Barrett, co-founder of Pacific Precious MetalsClick to Tweet
FAQ
Is Bitcoin Revolution legit?
This article does not reference opening a trading account with the Bitcoin Revolution trading platform or the Bitcoin Revolution app. The Bitcoin Revolution platform is one of many trading platforms dealing with the cryptocurrency market, and SuperMoney does not advise anyone to open a Bitcoin Revolution account. Please see the Bitcoin Revolution review or go to the Bitcoin Revolution website and compare it to others before making a decision on the viability of Bitcoin Revolution trading software or a Bitcoin Revolution trading account.
How do I trade Bitcoin?
Trading Bitcoin can be volatile, so make sure you decide what type of trading journey you want to experience. For those who like their trading parameters to revolve around short swings in the market, then a traditional trading platform like Coinbase or Binance should work fine.
What is the current status of Bitcoin’s mass adoption?
While Bitcoin is more recognized and traded than before, it hasn’t achieved the mass adoption that many hoped for. Its acceptance as legal tender in countries is still limited, and its primary role has shifted to being a store of value.
Why is Bitcoin compared to gold?
Bitcoin is often referred to as “digital gold” because, like gold, it is seen as a store of value and a hedge against economic uncertainties.
What are the challenges Bitcoin faces for mass adoption?
Some challenges include its volatility, scalability issues, regulatory concerns, and the need for more widespread public understanding and acceptance.
How does Bitcoin differ from traditional currencies?
Bitcoin operates on a decentralized network, meaning no single entity controls it. All transactions are recorded on a public ledger, ensuring transparency, and it has a limited supply, contrasting with fiat currencies that can be printed in unlimited quantities.
What are the benefits of countries adopting Bitcoin as legal tender?
Potential benefits include financial inclusion, faster and cheaper international transfers, attracting cryptocurrency enthusiasts, and potential economic boosts.
Are there any risks associated with countries adopting Bitcoin?
Yes, risks include Bitcoin’s price volatility, potential regulatory concerns, and challenges related to infrastructure, public acceptance, and education.
How do experts view the future of Bitcoin?
Opinions vary, but many experts believe that while Bitcoin may primarily serve as a store of value now, it has the potential for broader adoption for purchases in the future.
What is the significance of a Bitcoin ETF?
A Bitcoin ETF (Exchange-Traded Fund) would allow investors to get exposure to Bitcoin without having to buy the cryptocurrency directly. Regulatory approval of a Bitcoin ETF could open the door for more institutional investors to offer Bitcoin-related products.
Key takeaways
- Bitcoin promised a new version of currency with mass adoption, but that still has yet to happen.
- Central African Republic and El Salvador experimented with accepting Bitcoin as legal tender, with mixed results.
- Regulation and retail investment products through major institutions are the next step in helping BTC become more mainstream.
- Always be cautious when trading or buying Bitcoin from unfamiliar platforms.
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