Bitcoin and Crypto Assets Must Have These Characteristics to Go Mainstream

The awareness level of Bitcoin and cryptos in the public realm is rising, especially in the midst of all the unprecedented amounts of global money printing these days.

What is debatable is whether or not this relatively new asset class will be accepted by institutions and the people, and if so, how soon.

In order to do so, Bitcoin and other crypto assets will need to fulfill certain requirements:

• Easy to use
• Reliable and secure
• Scalable
• Global and democratic
• Not reliant on any fiat currency
• Cannot be counterfeited or tampered with
• A possible store of value/protection from inflation and deflation
• Options for insurance and custodianship
• Uncorrelated to other asset classes (ideal, but not a requirement)

Quite a lot of barriers to hurdle!

Let’s discuss each one to find out where we are in the spectrum.

Ease of Use

As one of the most important factors for worldwide acceptance, we are certainly not there yet. There has been significant strides made, and everyone in crypto land is acutely aware of this necessity.

Honestly, crypto usage needs to be as seamless and inconspicuous as using the Internet or the present banking system. Until that happens, mass adoption won’t.

That being said, more and more merchants throughout the world are accepting certain cryptos as payment.

Also, despite the dreams of many in the crypto space, cryptos will have work WITH the present financial system for the foreseeable future, rather than a total replacement.

Make no mistake, banks definitely see the threat that cryptos and blockchain technology pose to their hegemony and antiquated systems, and most are actively adapting to remain relevant.

This will all play out over the next decade or two.

Reliability and Security

Bitcoin is ABSOLUTELY reliable and secure. It has NEVER been hacked. It is open-source, which means theoretically anyone can contribute to the protocol.

What isn’t as reliable or secure are the crypto exchanges and “hot” wallets. Many are really good projects and are constantly improving, but there are scams and poor-quality/poor-design ones out there. Anyone investing and transacting in cryptos has to be diligent and properly vet the platforms beforehand.

We will need enough exchanges, platforms, and products that have proven themselves to be safe, reliable, and trustworthy before crypto’s potential can be realized.

Scalability

We need to be able to transact with any crypto asset with the speed and efficiency we are accustomed to with credit cards. And it will be absolutely essential before the “Big Money” can come into the crypto space in any significant way.

The good news is that this issue is being addressed by many crypto developers through many projects. The expectation is that this will not be a problem for long.

Global And Democratic

By that I mean that the crypto ecosystem is equal and fair to all participants, no matter who you are or where you live. This is already the case with most cryptos, certainly with Bitcoin. It is decentralized, borderless. peer-to-peer with no intervening intermediary, and censorship-resistant.

In essence, it is the IDEAL form of “money” and value transmission.

No Reliance on Government Currencies

We are presently in a global financial crisis of epidemic proportions (no pun intended). The decisions being made by the central authorities are unprecedented in scope and have no basis in history as to the outcome.

The COVID-19 pandemic has furthered the call for cashless economies, as paper currencies are full of germs that can insidiously serve as vectors of transmission that would be practically impossible to control. Already several Asian and European countries have nearly eliminated the use of cash.

What we need is an alternative to the present financial world order, some means to take control out of the hands of reckless decision-makers and give it back to the citizens where it belongs.

Luckily, we have that already in place — it’s called Bitcoin!

Anyone who knows something about the origin of Bitcoin knows that it was created eleven years ago in the middle of the last financial crisis, specifically to address the myriad faults of the global financial system.

After proving its resilience and getting bigger and stronger over those years, it is ready to assume its place in the new financial world order that is coming.

Counterfeit- and Tamper-Proof

Wow, over a decade old and no one has ever been able to create fake bitcoin or double-spend it!

The same cannot be said for cash or even gold.

Of course, this ties back into its security and trustworthiness as previously discussed.

Store of Value/ Protection From Inflation and Deflation

There is a lot of back and forth between experts on both sides of the “Bitcoin as a store of value” argument.

Suffice it to say that if enough people and institutions accept it as such, it will be.

There is no intrinsic value in paper currency, and very little in gold. It’s simply the faith of the people that determines what is money and what has value.

The future will decide Bitcoin’s fate.

But if one thing could have turbocharged its adoption, it would be the unlimited “quantitative easing”/money-printing globally.

There could be no conceivable scenario more bullish for crypto adoption than this!

You see, Bitcoin is the only asset class that is consistently reducing its new supply, and will continue to do so with the Halvings every four years. It is built into its code and is therefore 100% predictable and known.

The same certainly cannot be said for fiat currencies, or even for gold.

History will show if indeed the “Fed Effect” turns out to be the “killer use case” for Bitcoin and crypto assets.

One way or another, the present global financial system is broken and probably not fixable with the political systems we have in place throughout the world. There WILL have to be an alternative.

Insurance and Custodianship

Another important requirement for mass acceptance and use of cryptos is the ability to insure and safely store one’s holdings.

Let’s face it — the present system of buying, moving, and storing cryptos is complex, time-consuming, and scary. One little mistake and your cryptos could be lost forever. The average John and Jane Doe will never go for that.

That’s why the option of offloading that effort and responsibility is crucial for mass acceptance by the general public.

It may be that it doesn’t happen until crypto mutual funds and ETFs are widely available, but insurance and custodianship will still be needed for institutional adoption.

Non-Correlation

This is the “bonus” that Bitcoin brings to the table.

It has already been proven through extensive and reliable research that Bitcoin is the most uncorrelated asset class in existence (over longer time frames).

This is extremely important to anyone looking to build a durable financial portfolio to withstand any and all economic cycles and shocks to the system.

Once an asset allocation model becomes “standard practice,” almost all financial advisors use some version of it.

Hence, with many now recommending 1–5% of total investible assets being placed into cryptos, the total dollar amounts that may be invested in the space are staggering.

So that’s where we are today.

Now we each have a decision to make:

Get in now before the financial shenanigans hit the fan, or wait to see how it all plays out and hope for the best.

There’s no doubt what I choose. For me, it’s either take control or let the inmates running the asylum do it.