When asked why bitcoin hasn't taken off as an electronic, online cash, it's become conventional wisdom to blame ease of use as the predominant issue. When compared to other payment methods, most say, digital currency simply isn't as user-friendly.
This is true to an extent. As a payment method, bitcoin could be more user-friendly, and the industry should work to improve basic features of major services. It should be easier for everyday consumers to send the desired amounts without overspending and for default wallet features to be more intuitive.
But, to say that this is the biggest issue the industry faces is inaccurate. At the end of the day, it doesn't matter how easy something is to use if no one understands why they would use it at all.
On this paradox, I recently participated in a panel hosted by ZapChain (a bitcoin social network) focused broadly on "branding bitcoin" in the media. The goal of the talk was for myself, my former colleague Daniel Cawrey, Inc's Ben Parr and The Wall Street Journal's Paul Vigna to discuss the gap between the media's interest in the technology and consumer adoption.
One user asked how bitcoin can be easier for the less tech-savvy, and I rifled off an answer. Bitcoin, I said, has a "segway problem", a comparison that has been made, but perhaps not with the intent for this analogy to be constructive.
What's important to note is that the segway is and was broadly understood to be faster and easier than walking, and was much-hyped for it in the media.
A 2001 Salon article should be read by the industry with particular caution, as it gushes about how many leading minds, include Apple's Steve Jobs believed the segway could be "bigger than the PC" while enthusiasts gushed about how it could "replace walking".
It's obvious today that we don't live in a world of segways. Ultimately, many consumers never saw the benefit in actually getting on a segway in the first place or investing the money to acquire one – even though they were aware of and could see the advantages.
Bitcoin is at a similar impasse.
At this point, it's also safe to say the intrinsic benefits of bitcoin as a payment method are broadly understood. Whole industries have heard the message that bitcoin is at least advertising itself as a cheaper, faster way to send money, while allowing expanded privacy for consumers in transactions with online merchants.
Marc Hochstein, editor-in-chief of American Banker, hammered this point home in his opening address at last month's Digital Currencies + the Blockchain conference. In his talk, he spoke broadly about how digital currencies hold the promise to restore consumer rights.
"What if I told you the pseudonymity of bitcoin was not a fear to be managed, but a gift to be protected?" he said. "I believe that the crypto community is doing important R&D for a cashless future."
The awareness is palpable. The greater challenge, I would argue, is getting those who have heard the message to act on it.
In short, why segway when you can walk?
Ease of use
New technologies are often unrefined, and they come with high barriers to usability. But, it's difficult to say that the industry has not made significant headway on ease of use.
There's a compelling argument that major US bitcoin-buying services are already pretty user-friendly, despite the kinks. In fact, it's hard to see exactly how, at least in the US, obtaining bitcoin by purchasing it could be much easier for those with the right tools.
Bitcoin-based financial services startups such as ChangeTip, Coinbase and Circle already enable consumers to open an account, attach a credit card or bank account and begin buying and sending bitcoin. This works both ways – it's just as easy to receive and sell bitcoin, whole services enable this without requiring any action from merchants.
Ask yourself, how could these buying services be dramatically improved? Maybe they can and will, but why not emphasize what they've already achieved? The challenge again, is why use these services in the first place.
For example, I recently hired a freelance artist for design work on a friend's website. At first, she was skeptical about accepting bitcoin, favoring PayPal. I asked her to try out Coinbase, and told her I'd walk her through it. I didn't need to.
In her own recollection signing up and getting paid was "pretty seamless/painless".
The process was less cumbersome than sending a check. We didn't need stamps, envelopes or a pen. We didn't need to wait days.
Not to say we didn't wait at all or that there were no fees on the buying and selling of bitcoin (one can argue about the true costs of bitcoin mining), but still, it's very rare that you hear about the everyday ways bitcoin can be easier or at least feel easier to those involved.
As the saying goes, "perception is nine-tenths of the law".
Issue of onboarding
However, it's not easy for consumers to acquire this new form of digital cash, today – they need a credit card or debit card to do so.
Outside of the US, this situation is admittedly different. For all the talk about bitcoin reaching the unbanked, it's hard to foresee this happening in the near term, given that these consumers currently need financial services to gain access to the system (a problem companies like Abra and 21.co seem to be working on).
The biggest roadblock to this conversation may be that solving this issue doesn't fit easily into a business model. If the Internet subsidized the dissemination of information for free largely with advertising, bitcoin hasn't found a similar solution to do what it does – making money free – at least without the seniorage that comes from the network in the form of newly minted bitcoins.
Still, whatever it is, bitcoin works today and it's useful, just maybe not for the kinds of things we're accustomed to doing already.
This subject was recently discussed by Richard Gendal Brown in a blog post that made the case that, while bitcoin as a blockchain-based network solves few problems for banks, this doesn't mean it can't be useful.
"Bitcoin is probably worse than existing solutions for all the things most people and firms care about but vastly better for one single use-case (open access to value transfer) that could be very useful for some people," he writes, adding:
"If this is true, we should expect to see adoption of bitcoin come from the margins, solving marginal problems for marginal users."
Who are these marginal users? And how do they begin using bitcoin? That answer is less clear.
Rightly so, some startups are beginning to emphasize that the next wave of bitcoin users will acquire bitcoin by earning it – a novel insight that solves onboarding issues, even if it's less clear who pays the cost of acquiring these new users.
But, more broadly, it seems at least a change of conversation is needed – the industry is so caught up in being what's next, it's forgetting to emphasize what's happening right now.
As the segway proves, no theoretical or technical debate, no matter how elegantly solved, will make up for the miscue.
Confused man image via Shutterstock
This is true to an extent. As a payment method, bitcoin could be more user-friendly, and the industry should work to improve basic features of major services. It should be easier for everyday […]