Crypto’s Scalability Problem: Can It Become a Viable Form of Everyday Money?

In December 2024, Bitcoin surged past $100,000 for the first time, driven by optimism over a pro-crypto US administration. While this milestone marked a historic moment, it also highlighted an ongoing issue: cryptocurrencies still aren’t ready for everyday use.

Challenges to Mass Adoption

Bitcoin and other cryptocurrencies have gained popularity as investments, but they fall short when it comes to being used as real money. High fees, slow transactions, and often overcomplicated systems make crypto impractical for most people. To achieve mass adoption, the industry must address these issues and focus on making crypto easy to use and accessible to everyone.

Legacy Blockchain Systems Hold Crypto Back

When Bitcoin launched, its decentralized design was groundbreaking. However, over a decade later, its original system is struggling to keep up. Bitcoin’s block creation process, which occurs every 10 minutes, limits the number of transactions it can handle. During busy times, fees increase, and transactions take longer to confirm, making Bitcoin inconvenient and expensive for small, everyday payments.

Layer 2 (L2) solutions like the Lightning Network attempt to make Bitcoin faster and cheaper, but these solutions still rely on the same slow base layer. As a result, Bitcoin is primarily used as a store of value or an investment rather than a means of payment for everyday commodities.

Scalability Requirements for Everyday Use

For cryptocurrencies to function as money for everyone, they need to scale significantly. Current leading cryptocurrencies like Bitcoin and Ethereum can’t handle the volume of transactions required by a global payment system. Congestion and high fees make them impractical for daily use.

Traditional payment systems like Visa and Mastercard process millions of transactions every day with ease. To compete, crypto must match or exceed this level of performance. Small improvements aren’t enough; the industry needs bold new designs for blockchains that can handle massive transaction volumes without compromising performance.

The Case for Hybrid Models and Stablecoins

One potential solution is through hybrid systems that combine crypto’s strengths with the stability of fiat money. Stablecoins, tied to fiat currencies like the US dollar, offer promise. They provide the speed and privacy of crypto while avoiding the price swings of coins like Bitcoin.

Stablecoins are gaining traction in countries with unstable local currencies, offering people a safe and practical way to store and transfer value. However, they’re only part of the solution. The industry needs a seamless system that integrates stablecoins, traditional cryptocurrencies, and digital fiat currencies.

Changing the Perception of Crypto

Another significant hurdle to crypto adoption is how people view it. Bitcoin is often referred to as ‘digital gold,’ which makes people think of it as an investment rather than a means of payment. While this idea has contributed to Bitcoin’s growth in value, it has also hindered its potential to be fully integrated into everyday transactions.

For crypto to succeed as money, this perception needs to change. People should see it as a tool for everyday transactions, whether they’re buying coffee or sending money abroad. This requires not just better technology but also better communication and transparency from the industry.

The Path Ahead

The industry should focus on practical solutions rather than speculation and treating crypto as a stock market. If priorities shift, crypto could truly become 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.

“The question isn’t whether crypto can change the world. The question is whether we’re ready to make it happen.”

For more news on the world of cryptocurrencies and the latest developments in the industry, visit Global Crypto News.

About the Author

Alexander Guseff is the founder and CEO of Tectum, a subsidiary of Crispmind Ltd., advancing innovation in the FinTech and blockchain industries. With decades of experience in full-stack, high-performance blockchain development, Alexander has been instrumental in creating the Tectum blockchain, recognized as the world’s fastest layer 1 blockchain.

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