Why haven’t cryptocurrencies gone mainstream yet? Part of the problem may be that big banks and economists warn against investing in Bitcoin even as they quietly develop Blockchain applications to streamline their operations. They don’t want cryptocurrencies rocking their boat. But more importantly, the middle class and small businesses don’t want anything rocking their boat. Members of the middle class know that they may only be a couple of paychecks away from being homeless and any hiccup in the value of their 401(k) portfolio could force them to delay retirement. They don’t want to mess with something as volatile as Bitcoin even if it is hitting record highs lately. So if they mess with cryptocurrencies at all, they’re probably going to dabble with a few hundred dollars at most.
It’s a Feedback Loop
Hodl hodl hodl, and if you must spend cryptocurrencies, spend your Bitcoin Cash for the lower fees and faster transaction times. Right? However, it becomes a dangerous feedback loop when small businesses see that their target audiences are unwilling to use cryptocurrencies in their daily lives. When the middle class isn’t investing in cryptocurrencies, it naturally follows that they aren’t going to be spending cryptocurrencies at their local retailers. This becomes a problem for the rest of us who might be willing to buy a bottle of water with some DASH.
This can change if we insiders quit obsessing about when Bitcoin is going to reach its next record high and start actually using cryptocurrencies. I know guys who have lived on cryptocurrencies for years. Some Bitcointalk users who may not be longtime crypto-veterans but have enough experience to no longer be newbies have quit asking how they can buy bitcoins and started asking how they can earn bitcoins. This means the feedback loop that slows down mass adoption can be broken if cryptocurrency insiders take the three-pronged approach of creating “Quickbooks for Bitcoin,” educating the middle class about how cryptocurrencies can fit into their lives, and reaching out to businesses about the benefits of accepting cryptocurrencies.
Quickbooks for Bitcoin
They do say to never give away your best business ideas, but small business owners probably wish that there was a Quickbooks for cryptocurrencies. As things stand now, they have BitPay for Bitcoin, or they might use Coinpayments if they want to accept all major cryptocurrencies, and then they have to use Bitwage if they don’t want to manually send Bitcoin payments to multiple addresses to pay their employees in Bitcoin. There are very few wholesalers who accept cryptocurrencies. This makes cryptocurrencies a headache for accountants who would probably rather make their liquidity someone else’s problem.
Business owners like things to be pretty much predictable. The cryptocurrencies they choose to accept should be stable, usable, and (most importantly) have fast transactions. Bitcoin might be considered the “digital gold” of cryptocurrencies, but you don’t see most business owners accepting payment in gold coins, either. They might be more interested in accepting Litecoin or DASH for the faster payments and lower fees so that they can get their cryptocurrencies without wasting their customers’ time as they wait for payments to confirm.
This is something that people who try to sell cryptocurrencies to businesses don’t necessarily realize. The raw technology behind cryptocurrencies is better than the banking system, yes, but small business owners don’t necessarily have the time or inclination to implement something that doesn’t work right out of the box. Unless you’re offering to install BitPay PoS terminals, you might as well not go there. But if you can sell “Quickbooks for Bitcoin,” that’s a major score because then the business owner can accept cryptocurrencies, and then hit a single button to pay his or her employees in cryptocurrencies.
Middle Class and Small Businesses Might Be Interested, If It Benefits Them
One of the hard parts of reaching the middle class is that they’re used to the idea that they’re somewhere in between the very rich and the very poor, and could be squelched between the two if they take too many risks with their money. The very rich can afford to do more than dabble in cryptocurrencies because it won’t hurt as much if they lose. The very poor have very little to lose by using cryptocurrencies if they can, although they might prefer to use one that has lower transaction fees than Bitcoin. The middle class could lose their shirts if they invest much more than they would normally contribute to their 401(k) plans and then it turns out that all those financial elitists were right when they called Bitcoin a bubble.
So it becomes a matter of whether the middle class can buy a latte with cryptocurrencies without spending a ton on fees. It’s interesting to note that Bitcoin Cash is catching on quickly with businesses that are already interested in the promise of cryptocurrencies because nobody wants to pay half the cost of a meal in transaction fees and then hope the transaction confirms in a timely fashion. Bitcoin isn’t very suitable for microtransactions and this can spook a middle class that may already be two paychecks away from homelessness.
For this reason, the middle class might like the free market solutions offered by having so many cryptocurrencies available. Like gold, Bitcoin may be a good vehicle for storing value but isn’t very useful for making everyday purchases. You might buy a car or a house with it. If you want a decent compromise between using cash and using a credit card, though, you might consider using a top altcoin like Bitcoin Cash, Litecoin, or DASH.
To pull off reaching the middle class, cryptocurrencies will have to be “idiot proof”. New users won’t necessarily be interested in what goes on under the hood. They just want to know how they can use it and it might actually be an easier sell to people who have tried Apple Pay because they’re used to the idea of mobile payments. If there’s any challenge when explaining cryptocurrencies like you’re talking to a 6-year-old, it’s making sure that they know that Bitcoin, Bitcoin Gold, and Bitcoin Cash are separate cryptocurrencies simply because there have been issues with people sending Bitcoin Cash to a Bitcoin address.
If you can explain cryptocurrencies in simple terms, you may have better luck explaining the benefits of cryptocurrencies to small business owners and the middle class. “Quickbooks for Bitcoin” might not be a thing yet, but you may be able to steer them toward tools that they can use to integrate cryptocurrencies into their everyday lives. They may still be leery about investing and holding long-term, but at least they’ll be more inclined to actually use it if they see that they can benefit from cryptocurrencies right now.