Brian Armstrong, the CEO of Coinbase, is a household name in the crypto community. While Coinbase itself is not free from controversy, many feel that it’s done a great deal to introduce people to cryptocurrency and before 2018 it was by a vast majority the most popular way to buy Bitcoin and Ethereum.
That led to the “Coinbase effect,” the tendency of currencies to pump in price when added to Coinbase. Today Coinbase might not have quite the power it once did, but it’s still a popular platform, and when Brian Armstrong announced an AMA (ask me anything), hundreds of people submitted questions.
The first one he answered, what does cryptocurrency need to get mass adoption?
The problem with Bitcoin, and just about every other cryptocurrency apart from stablecoins, is that they fluctuate so heavily against the dollar. If someone purchased $100 of Bitcoin in December of 2017, they would have now just $25. That’s a pittance compared to the 2% a year most people in developed countries lose to inflation.
While the extreme price fluctuations may be appealing because of the potential for substantial gains when the price goes up, Armstrong believes that a more stable valuation is necessary if traditional investors are going to get involved in crypto.
The problem with Bitcoin is that ten years after its creation it still only does about seven transactions per second. Lightning Network could be the solution to this problem, but as it stands now, it’s complicated to use and doesn’t work for larger payments.
That’s a problem for crypto and a major damper on adoption. However, as Brian points out, there is a lot of development taking place. He mentions improvements to the Lightning Network, other layer two solutions (like Ethereum’s plasma) and goes on to say, “luckily there is now five to ten really well-funded teams working on all kinds of solutions – and a lot of these are going to be coming out and continuing to grow in the next six months to twelve months.”
As many people have come to realize, the experience of using crypto is not nearly as intuitive as it should be. While coins like Nano and NEO are renowned for their well-designed wallets, many coins lack that. Also, buying, trading and selling crypto can be stressful.
Signing into exchanges, using authenticator codes, checking your email because an IP address isn’t recognized, filling out Google captcha forms and more. Summing it up Brian says, “it’s still complicated to go there, be able to sign in to your wallet, whether it’s a Chrome extension or mobile. It should work like WeChat, or something like that.”
Further, he believes that to get more people involved in crypto, “we need to get usability simpler and simpler and simpler. Kind of like having the Netscape moment or the iPhone moment.”
That hasn’t happened yet. While Coinbase could, arguably, be labeled as the service closest to the crypto equivalent of the iPhone, it’s still not quite there. What crypto lacks is the service, the one thing that everybody uses and is familiar with. A simple way to buy, sell, trade and safely store funds.
While that doesn’t exist yet, the good news is that it’s not far away. With the number of incredibly talented (and well-funded) individuals and institutions working on the problem, a solution is just over the horizon.
Once it arrives and the scalability problem is solved, and volatility evens out, it will pave the way for crypto to finally achieve what everyone would like to see; mass adoption.