Raising Awareness Of Bitcoin's Impact On Society Is Key To Further Adoption
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Bitcoin might not be the world's reserve currency just yet, but it seems that the tide is turning in favor of much broader adoption.
Many believe Bitcoin has already reached a point of critical mass from which it will not turn back. Over the last decade, the world's most popular cryptocurrency has cemented its popularity as a store of value, an investment, an alternative asset, and a safe, internet-based payment rail that knows no borders. It has come a long way and is already far beyond the point of subsistence, yet the goal of mass adoption remains out of reach.
Since it was first introduced in a whitepaper by Satoshi Nakamoto in 2008, Bitcoin has grown and evolved to such an extent that the digital future of the world can now be reimagined. Nakamoto proposed that Bitcoin could serve as a "system for electronic payments" that's able to operate in a permissionless way. It was a revolutionary creation that has matured to such an extent that today many believe the wider cryptocurrency market is slowly but surely decoupling from that of traditional finance to stand on its own two feet as a truly alternative form of money.
Bitcoin adoption has grown in virtually every country in the world. Not only is it recognized by forward-thinking enthusiasts in developed countries like the USA, U.K., Australia, and Japan. These days, it has seen rapidly rising adoption in emerging markets across Africa, Asia, and Latin America.
A recent study by Forrester Research on behalf of the cryptocurrency exchange AAX found that Bitcoin adoption has soared over the past few years in emerging markets, and not merely as a speculative investment like most users in the West. Rather, Bitcoin is enjoying increasingly widespread use as a store of value and a means of exchange.
The findings of Forrester's report were eye-opening. In the Middle East and Southeast Asia, Bitcoin is increasingly being adopted as a means of money management. Due to its unique ability to escape broader macroeconomic conditions, Bitcoin has empowered consumers in these regions to become financially independent. As a result, it has seen increased use as a store of value, with consumers relying on Bitcoin to preserve the value of their savings, invest with the aim of making gains, and hedging against risky investments elsewhere.
Bitcoin has taken a slightly different path in Africa and Latin America, where it has also seen rising adoption. In these markets, a growing number of consumers are using Bitcoin just as intended - they're making transactions, using it to buy and sell goods and services, transfer money to friends and family, and more, Forrester's study found.
Racing Towards Global Adoption
The great dream of all Bitcoin fanatics is that the cryptocurrency will one day establish itself as the world's default currency, upending the likes of the U.S. dollar, the Euro, the U.K. Pound, and even the gold standard. It's hoped that the world will voluntarily transition itself to using Bitcoin as a means of everyday payment, rejecting traditional fiat currencies. Adherents say Bitcoin can be the basis of a fairer, more transparent, and accessible financial system that governments will be unable to manipulate. What's more, Bitcoin is anti-deflationary, meaning consumers won't see their bank account savings wither away due to the rising costs of goods and services.
For many people, this vision sounds impossible to achieve. Despite its meteoric growth, Bitcoin still has millions of detractors who insist it's nothing but a gimmick or a fad, or even worse, accuse it of being some kind of Ponzi scheme that will soon come crashing down.
However, there are reasons to believe in Bitcoin's staying power, not least the growing fears that the world's fiat currencies will soon be hit by runaway inflation. If that happens, people are more likely to see Bitcoin as a more stable option in which to keep their funds.
Others believe that the forthcoming launch of Central Bank Digital Currencies in major economies could help spur Bitcoin's adoption. If the world's governments insist that people transition to digital money and awareness of how it works grows, many consumers might see Bitcoin as a superior option due to its fixed supply and decentralized nature.
Then again, there could be other nations that choose to follow the path of El Salvador and embrace Bitcoin as a legitimate currency in order to escape restrictions placed on them by bodies such as the World Bank and International Monetary Fund.
Bitcoin Education Is Key
Perhaps the most important driver of Bitcoin's continued adoption will be education. As Benjamin Franklin, one of the Founding Fathers of the United States, once said: “An investment in knowledge pays the best interest.”
That was certainly true for Bitcoin's earliest adopters who scooped up hundreds of BTC on the cheap and went on to become millionaires in fiat terms.
Education is essential for adoption. By teaching people about Bitcoin, the number of users can only grow, until such time as it reaches a point where the network effect is unstoppable. In order to reach this point, people first need to be made aware that Bitcoin is a thing.
While it might seem like most people are at least aware of Bitcoin, there are still millions of people in the world who remain ignorant of what it is and how it works. A February 2021 report from Crypto.com estimated that there are around 100 million individuals in the world that own some Bitcoin. It's an impressive number, but still, just a drop in the ocean compared to the world's population of 7.9 billion. Less than 2% of the world's population is currently using Bitcoin.
It means that there's still a lot of work to be done, and it's the responsibility of Bitcoin advocates to carry it out.
For now, Bitcoin is still in the very early stages of adoption. As with all new products and technologies, it falls on the early adopters, or innovators, to teach the rest about Bitcoin's value and its practical applications. Those who're using Bitcoin now will play a crucial role in encouraging others to start using it too.
The good news is that the Bitcoin community is already hard at work in raising awareness. We've seen countless communities spring up all over the world, with hundreds of media publications, podcasts, and influencers that are all devoted to educating the masses about what Bitcoin is and what value it can provide. Most crypto businesses are playing their part too. For example, cryptocurrency exchanges like Coinbase provide a learning platform that makes it possible for users to learn about Bitcoin and other tokens and earn rewards for doing so. Then there are others, like AAX, with its AAX Academy that provides continual insights on the latest trends and happenings in the crypto industry.
These efforts are helping millions of people to better understand Bitcoin and crypto, yet more effort is needed if we're to achieve mass adoption. From simple topics such as how to create and use a Bitcoin wallet to understanding how financial derivatives work on the Bitcoin Lightning Network, much more learning remains to be done.
One of the best ways to accelerate Bitcoin adoption is to bring education to the masses. Courses on how Bitcoin works and the potential positive impacts it can have on society should be offered in schools and universities. Children, who are just beginning to understand how money and the economy works, should be taught that there is an alternative and potentially superior system available that's based on the idea of decentralization.
Teaching Bitcoin's Impact
Moreover, Bitcoin should not just be positioned as a speculative investment that might make people rich. Rather, education needs to focus on the impact Bitcoin can have on society at large. Making money is nice, but changing the world and distributing wealth more evenly would be a much better achievement.
In a recent post on AAX Insights, AAX Head of Research and Strategy Ben Caselin highlights the real impact Bitcoin is having in emerging markets across the world and changing people's lives for the better. One key advantage that people are seeing in Bitcoin is its usefulness as a hedge against oppressive governments, Caselin said. Those who are facing persecution, they can easily be excluded from the traditional banking system. With Bitcoin, that is no longer possible, meaning it can serve as a tool for retaining financial autonomy.
At the same time, digital assets can be moved anywhere in the world, easily and almost instantly. All that's required is for someone to remember their 12-word seed phrase and they can access their Bitcoin funds from any location through an internet-connected device.
"At the core level, Bitcoin is intended to restore freedom, improve personal agency and provide a hedge against tyranny," Caselin said.
Over the past few years, we've seen all kinds of reports about how institutional investors are buying up Bitcoin, how big companies like Tesla accept it for payment, and how traders are making millions through complex mechanisms trading spot prices. These kinds of stories are encouraging and help to promote Bitcoin, no doubt, but it's education about the real-world use cases that will make the difference.
We need to raise awareness about the immigrants in Europe who are sending money back to their families in Benin, and the households in Venezuela that are using Bitcoin to protect their savings from hyperinflation that people really need to hear about. These are the stories that show the real and positive effect Bitcoin has on the world.
As Caselin says, "impact will drive adoption."