Yes I said it!
I actually said the one thing any red blooded bitcoin believer hates to hear. We need to stop the HODL mentality in order for bitcoin to truly achieve mass adoption.
If you’re reading this you most likely fall into the “red blooded bitcoin believer” category and actually hold to the HODL mentality yourself.
Hear me out for a moment, don’t run off.
I sympathise with you, believe me I do. I'm a bitcoin believer myself, and am a HODLer as well… at least to some extent. However, I recognised that the one real issue bitcoin currently has is simply this… not enough people are actually using it in the way it was intended.
Sure there are many people speculating on it, hoping for the price to hit one million dollars during the next bull run. But speculating on it is very different from using it.
When Satoshi Nakamoto (whoever that actually was) wrote the bitcoin whitepaper, the goal was to create a useable day to day currency, and not just a store of value. In order to truly achieve this goal, people need to spend bitcoin on real world items.
At the moment this is really hard to do, there simply aren’t enough practical solutions that allow users to easily buy, then spend their bitcoin.
If you actually own any bitcoin at all, you know what I mean, one has to jump through a hundred hoops just to buy some.
Most crypto exchanges make it difficult to onboard. Once you’re on, connecting your bank account to your trading account is often a nightmare, with approval times often taking multiple weeks and sometimes months.
And yes, I fully understand this has a lot more to do with regulatory issues than technical, but to be fair the tech often sucks as well… it’s just not easy enough to use.
Once you have actually bought the crypto, figuring out how to store it on your own often takes hours of research. Not to mention huge learning curves to overcome before ever actually grasping the basic concept of blockchain and crypto assets.
For most of us the work and time needed to achieve this is well worth it, knowing that one million dollar bitcoin is right around the corner. But for the average consumer, the whole process I just described is a total turn off, and a complete barrier to them ever considering using it as a means of exchange.
So what does the HODL mentality have to do with any of this?
Let me explain… as long as the main use case for bitcoin is a store of value rather than a means of exchange, the majority of users will have the HODL mindset by default. This Causes the main focus of development to be in the investment space.
This is easily proven just by looking at the amount of crypto exchanges listed on CoinMarketCap, nearly 20,000 to date. Bitcoin is only 10 years old, most people in the world have never heard of it, and yet there are 20,000 exchanges to trade on. Do we really need this many exchanges?
Every day I see another advert for a new exchange, offering the latest and greatest in trading features. There are even a number of exchanges now offering 100x leverage. 100x! can you believe it? One bad trade and you have lost all your funds. Crazy.
This is not the path to mass adoption, this is the path to mass restriction!
I think we need to pump the brakes for a bit and start to really think about the direction we are heading.
We also have to think about the image we are giving bitcoin and the entire crypto space… as a “speculative bubble” where “theres nothing you can do with it”, as stated by Peter Schiff on a CNBC interview.
Now don't get me wrong… I am aware of all the great things happening in the crypto & blockchain space, and how many Fortune 500 companies are jumping on board. However I still see too many developments focused on the investment end of the spectrum rather than the consumer spending end, and to me this is the problem.
Until we get to the point where bitcoin is being used as a means of exchange more than a speculative investment, the innovation around it is going to be stunted, and this will ultimately slow down the process of mass adoption. Bitcoin needs to be easy to purchase, easy to hold, and even easier to use. Until this is achieved the general public is going to stay away.
My other concern with bitcoin being a speculative investment rather than a means of exchange, is that governments will inherently need to make it harder and harder to purchase for the average person. Governments will do this by continuing to create more and more restrictive laws on who can and cannot “invest” in bitcoin. We know this always happens, as public officials have to “Protect the Consumer”.
To me this just kills the original vision proposed by the creator(s) of bitcoin and blockchain tecnology.
So what is the solution?
I am not saying that you should run off and ditch all your bitcoin in exchange for a Lambo. I am however saying that for the betterment of the entire crypto community, it would be wise if we actually did HODL (cold store) a portion of our bitcoin, and not speculate with it on some dubious trading exchange. Earmarking a small portion then keeping it aside for the sole purpose of spending it on real-world items.
In doing so, change will naturally occur, as the barriers that are currently in place will eventually be overcome with innovative, easy to use purchasing tools.
Bitcoin is an amazing innovation, that was intended to be used by all, not just a select few… lets try and keep it that way.