Bitcoin Hits $100K, Yet Struggles as Everyday Money: Can Scalability and Stablecoins Save the Day?

Crypto’s Struggle to Become Everyday Money and the Path Forward
Bitcoin’s historic surge past $100,000 in December 2024 has ignited excitement in the crypto world, yet the dream of using cryptocurrencies as everyday money remains a distant reality. Despite the bullish market, the crypto industry is grappling with significant challenges that hinder its adoption as a practical means of payment.
- Bitcoin reached $100,000 in December 2024
- High fees and slow transactions limit crypto’s everyday use
- Scalability solutions and stablecoins offer potential
- Public perception needs to shift from speculation to utility
The rise of Bitcoin to over $100,000, driven by optimism about a pro-crypto US administration, has put cryptocurrencies in the spotlight. Yet, as Alexander Guseff, CEO of Tectum and a blockchain scalability advocate, points out, the real challenge is using these assets for everyday transactions. Guseff argues that cryptocurrencies, particularly Bitcoin, face significant hurdles due to high fees and slow transaction speeds.
“If the industry wants to see mass adoption, it needs to fix these problems and focus on making crypto easy to use and accessible to everyone.”
Bitcoin takes about 10 minutes to create a new block. This slow pace limits how many transactions it can handle at once, making it impractical for the small, frequent payments that characterize everyday spending.
“Bitcoin’s block creation process, which happens every 10 minutes, limits how many transactions it can handle.”
To combat these limitations, layer 2 solutions like the Lightning Network have been developed. Think of the Lightning Network as a “helper system” that allows faster and cheaper Bitcoin transactions outside the main network. It uses “channels” to facilitate off-chain transactions, improving speed and reducing costs. However, these solutions still depend on the slow base layer, which poses a challenge for widespread adoption.
Leading blockchains such as Bitcoin and Ethereum simply cannot handle the transaction volumes required for a global payment system. In contrast, traditional payment systems like Visa and Mastercard process millions of transactions daily with ease.
“Traditional payment systems like Visa and Mastercard, on the other hand, process millions of transactions every day with ease.”
One promising avenue for improvement is the use of stablecoins. Stablecoins are cryptocurrencies tied to the value of traditional currencies like the US dollar, offering stability while retaining the speed and privacy of crypto. They’ve gained traction in countries with volatile local currencies, providing a practical and safe way to store and transfer value.
“Stablecoins are gaining traction in countries where local currencies are unstable, offering people a safe and practical way to store and transfer value.”
Guseff suggests that the future of cryptocurrencies as money may lie in hybrid systems that integrate stablecoins with traditional cryptocurrencies and digital fiat. This approach could offer the scalability needed for mass adoption.
However, the biggest challenge may be shifting public perception. Cryptocurrencies are often seen as speculative assets or ‘digital gold’ rather than practical tools for everyday transactions. For crypto to succeed as money, this perception needs to change.
“For crypto to succeed as money, this perception needs to change.”
The road ahead is not easy, but the potential rewards are immense. Cryptocurrencies don’t just need technological advancements—they need a new mindset. The crypto industry must move beyond its focus on speculation and embrace the vision of becoming the money of the future.
“The road ahead isn’t easy, but the goal is worth it. Crypto doesn’t just need new technology—it needs a new mindset.”
While the challenges are significant, the global trend towards crypto adoption, with countries like China, the UK, Bhutan, and El Salvador holding substantial amounts of Bitcoin, suggests a path forward. The incoming Trump administration’s pro-crypto stance and plans for a crypto reserve could further boost this trend. However, as Chris Weston from Pepperstone cautions, implementing such a reserve will require time and careful consideration.
The potential for cryptocurrencies to disrupt traditional finance is undeniable. Bitcoin and other cryptocurrencies embody the principles of decentralization, freedom, and privacy, pushing the boundaries of what money can be. Yet, the journey to becoming everyday money is fraught with challenges that require both technological ingenuity and a shift in public mindset.
As we advocate for effective accelerationism and the transformative power of blockchain technology, we must also remain grounded in reality. The promise of crypto as a tool for financial revolution is compelling, but so are the hurdles it must overcome. By understanding and addressing these challenges head-on, we can pave the way for a future where cryptocurrencies seamlessly integrate into our daily lives.
Key Takeaways and Questions
What challenges does Bitcoin face as everyday money?
Bitcoin faces challenges due to high transaction fees, slow processing times, and its block creation process, which limits transaction capacity.
What are layer 2 solutions, and how do they aim to improve Bitcoin?
Layer 2 solutions like the Lightning Network are designed to improve Bitcoin’s transaction speed and reduce costs by using “channels” for off-chain transactions.
How do traditional payment systems like Visa and Mastercard compare to cryptocurrencies?
Traditional payment systems process millions of transactions daily with ease, setting a high benchmark that cryptocurrencies need to match or exceed.
What role do stablecoins play in the future of cryptocurrencies?
Stablecoins offer stability and practicality, combining the speed and privacy of crypto with the stability of fiat money, making them suitable for everyday use.
How can public perception of cryptocurrencies be changed to facilitate mass adoption?
Public perception needs to shift from viewing cryptocurrencies as speculative assets to practical tools for everyday transactions, requiring better technology and communication from the industry.
What is the main argument about the future of cryptocurrencies?
The main argument is that cryptocurrencies need both technological advancements in scalability and a change in mindset from speculation to practical use to become the money of the future.