Bitcoin was introduced by Satoshi in a white paper in 2008 as a novel concept of a decentralized payment system. The idea was that it could be used anywhere, for everything, and by anyone. There was no need for any intermediary or exchange rate. It was intended as a global currency for all transactions. However, greed came in the way. Rather than being a payment system, it became an investment product.
There Was Genuine Desire to Change the Global Financial System
The early adopters of bitcoin were evangelists. They saw the 2008 financial crisis and wanted to change the scenario for the better. The idea was to create a new financial system for the world. However, the speculators smelled the moneymaking opportunity inherent in bitcoin. They started trading it as a financial product. It caused unpredictable and volatile fluctuations in its price. Over time, bitcoin started being used more as a speculative cryptocurrency than a payment system.
How to Make It Suitable for the Payments?
That is possible only when it is expandable and scalable. However, the blockchain technology enabling bitcoin is unable to meet this demand. Developers are always trying to develop decentralized blockchain systems that are not only scalable but also secure. Without these developments, the speculators will remain the majority of bitcoin users. As long as they remain the majority investor in it, its value will remain volatile. It is unlikely to become a mainstream payment method without new innovations in this field.
This high volatility of bitcoin is what has given rise to stablecoins. These coins have emerged because of the demand for stable digital assets by businesses. They expect certainty in a payment method. However, stablecoins presently remain limited to crypto exchanges and DeFi applications. They have become a tool to get attractive returns on investments rather than a payment method. Secure and scalable blockchain products must be developed to make digital assets acceptable for retail transactions.