Jun 052014

Bitcoin Consumer Adoption

Gone are the days when everyone in the Bitcoin community cheered whenever a new business started accepting Bitcoin. Today, there are tens of thousands of businesses all over the world that accept Bitcoin, and through gift cards and third party re-sellers, you can pretty much shop anywhere through your Bitcoin.

And why wouldn’t businesses accept Bitcoin? It offers lower fee solutions, no chargebacks, free publicity and a USP to sell to. It wouldn’t be surprising if the largest consumer businesses on the planet started accepting Bitcoin within the next few years – after all, they have absolutely nothing to lose and potentially something to gain (higher margins, especially in the retail industry).

The real challenge for Bitcoin to truly succeed as a currency though is consumer adoption. Not people within the community who currently use and evangelize Bitcoin, but the ordinary people who couldn’t care two hoots about how they pay for things. Why would someone want to use Bitcoin instead of just swiping their credit card, which takes as little effort as is humanly possible without Google glass? There are several reasons why consumers might want to go out of their way to use Bitcoin instead of credit cards –

  • Merchant Discounts: Now that merchants have tasted the sweet sweet paradise of no fee, no chargeback world, why would they not go one step further and encourage their customers to use Bitcoin? Merchants can end up saving significant bucks in the process (Charlie Shrem mentioned his EVR bar loses about 10% in chargebacks. That’s huge). Already, long-time Bitcoin merchants like Gyft give discounts on Bitcoin purchases. More merchants should jump on the bandwagon, and consumers can end up saving money when they pay with Bitcoin rather than through their credit cards.
  • International Travelers’ Heaven: The international tourism industry’s export earnings in 2014 reached $1.4 trillion. That’s a lot of currency exchange going on, with an average cost of anywhere from 3%-7% depending on the currencies involved. This is a huge inefficiency in the current financial system. Bitcoin solves this problem hands down, and doesn’t care about where in the world you live. As Bitcoin grows in popularity, international travels would be wise to travel with Bitcoin instead of cash, which is safer, more secure and cheaper.
  • Financial Privacy: This isn’t the biggest concern on people’s minds today, but it might be in the future, as big data grows and privacy becomes increasingly important to people. We are already seeing developments in Europe that value privacy above profits. As citizens of the world grow more aware, they would want better financial privacy tools, like cash. Bitcoin is the closest they can get in this regard. In addition to everyday purchases, privacy related to industries that are generally delegated to the ‘shameful’ category in society, like porn, can greatly benefit from using a currency like Bitcoin as consumers will be more likely to spend money when that spending is private.

These are just some of the ideas through which consumer adoption for Bitcoin will increase in due course of time. Know of any other?

Photo Credit: Steve Rhodes

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