While Bitcoin is becoming a household name, it is still wildly misunderstood, has volatile price swings, and is slow to complete transactions. This culminates in a user experience problem that severely hampers user adoption across the cryptocurrency. Why does Bitcoin have such a UX problem?
There is an initial problem of consumer education for Bitcoin. Cryptocurrency looks to take the place of fiat currency, yet most people don’t actually understand what Bitcoin is and how it works.
What are the fees to buy Bitcoin? Where can I buy it? What if I want to buy another cryptocurrency? Can I fund my account with a credit card? What is a “bitcoin wallet” anyway? Consumers fear putting money into anything they do not understand.
A lack of government regulation may be helping the Bitcoin market at the current time, but it causes there to be no standards for Bitcoin exchanges, wallets, and other consumer-facing entities.
A new Bitcoin enthusiast would have no idea what to look for in a reputable site to buy and sell Bitcoin. Any site with flashy graphics and promises of low transaction costs may lure in unsuspecting visitors and scam them out of money in the process.
While there are billions of dollars worth of Bitcoin exchanged per day on average, most transactions occurring do not relate back to the intended uses of Bitcoin, and instead, are transacted by speculators and investors looking to make money from buying and selling the cryptocurrency.
Bitcoin was designed to help those without access to banking or wishing to store their value in an asset that was reliable and secure. However, these intended use cases are not getting as much traction as previously thought and speculators are the only ones trading the cryptocurrency in an attempt to gain themselves even more money.
How can Bitcoin expect to be the currency of the future when its price fluctuates so drastically from day to day? Consumers do not have any confidence in a currency that is worth $10,000 and $20,000 one month later.
Some drastic price fluctuations of the cryptocurrency leader Bitcoin.
The rising price of Bitcoin also detters users who will never want to be forced to do math when considering if they are getting a good deal on an everyday purchase. Is 0.00016 Bitcoin a good price for coffee? What about 0.0004 Bitcoin?
When a $2.50 cup of coffee costs more for the transaction than for the coffee itself, you know there is a problem. This is what Bitcoin is dealing with in its current form, rising transaction costs due to congestion on its network.
Fees play an especially important role when there are many Bitcoin transactions happening at the same time. At times when the network is full, fees have soared to as high as $20 per transaction.
The speed of transactions via Bitcoin is fast compared to a bank transfer or international money order, but for small purchases it still remains slow. Swipe a credit card in a department store and it will take only seconds to register and verify the payment. Pay with Bitcoin and it will, by design, take about 10 minutes.
This is where a new form of Bitcoin comes in that promises to slow down transaction times. Bitcoin Cash was spun-off from Bitcoin due to its desire to allow for bigger transaction blocks, creating quicker speeds for consumers.
The highly touted Lightning Network is being developed by Bitcoin’s core development team as an antidote to user experience problems. This proposed solution is said to decrease transaction times and cost across Bitcoin, and at the same time allowing for scalability across the network.
Questions still remain about how the masses will adopt this new technology and the learning curve that comes with it, and Bitcoin still has a ways to go before it becomes the currency of the future.
As Bitcoin continues to grow, reaching prices well above $10,000, more will be expected of it for mass market adoption. As long as credit card and cash transactions are faster, cheaper, and simpler to process, Bitcoin could begin to lose its market share, and fast. The Lightning Network hopes to revive the idea that digital currency via Bitcoin is the next evolution of money, but will it be enough?
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