While my title slightly misstates Hannah Rosenberg's argument here, it is an interesting way to think bitcoin adoption.

Hannah Rosenberg says that the barriers to using bitcoin are no longer technical, but rather are economic and psychological.

The collective understanding of Bitcoin as a get rich quick plan and that mixed with Gresham’s Law are the biggest barrier to adoption in the states right now.

She presents a number of reasons why she thinks that bitcoin is never the first option people consider when needing to make payments -- even though it might, in some cases, be the easiest solution.

What I would love to see happen now is us pursuing the builders and the B2B transactions. Lets build for a manufacturer in La Paz that can’t send a wire transfer to a customer in Lima. We need to enable that transaction and we need to let them send that transaction, or view their balance, in USD.

I really liked her emphasis on solving the pain points businesses are experiencing right now...but I suspect that given the current regulatory regime in which Bitcoin exists, it often just moves the friction from regulatory hurdles before the payment to regulatory hurdles after.

Interesting to see someone championing bitcoin on LinkedIn, too.

Below is the whole article because LinkedIn is an abomination.

How do we increase Bitcoin adoption for retail payments? It’s a hot topic at the moment and I think our biggest issue is that we don’t understand what holds us back.

So of course I’ll walk through all that in detail! But first, here is my thesis for this whole big post; We have to build for people who currently, actively need our services. These are people who are experiencing real pain points when trying to transact. The barriers we face are high and only those motivated to try new things will wind up with our services.

For a long time the barrier was the tech. The first payments with the Bitcoin QT wallet were pretty straight forward, but so different. Then we had mobile wallets and cold storage, and that was tricky but not too bad… kinda fun. Then came the fee spikes and we had to switch to Lightning and that was tough. Lightning had a big learning curve. Even with the mobile wallets hiding the complexity it was still often a rough user experience.

But now, now we have some really good options. I’ll note Wavelength here, but there are other also options out there that can be used to create excellent user experiences. We have, very cleverly, worked around a hidden away the complexities of Bitcoin. This is no longer a tech problem.

And I’ll disagree with some of the industry colleagues here, this was and will never be an education problem. We are the experts, it’s our job to build things that work for people who are experts in other things. If someone has to read Mastering the Lightning Network to use our wallets we’ve failed.

At this point, the barriers are economic and psychological.

Psychological blockers:

• The “Bitcoin = investment” collective unconscious
• Switching costs
• Unit of Account

Economic blockers:

• Gresham’s law
• Volatility

The collective unconscious understanding of Bitcoin as a get rich quick plan and that mixed with Gresham’s Law are the biggest barrier to adoption in the states right now.

When the average Jane somehow winds up with an app on her phone that shows her a Bitcoin balance, she doesn't think “I guess I’ll walk to the corner store and buy some eggs”, she thinks “Ooo, maybe this will make me rich!” and she holds on to it. And when standing in a shop that accepts both BTC and USD she is going to hold on to her get rich quick ticket and hand over the paper.

But wait, there’s more… let’s go through the others.

Switching costs. Bob gets annoyed just having to log into his Chase bank account to push some button yet again. No way is he switching up his whole payments setup with out big push from a serious pain point. Bob already has a payment card that works just fine when he goes to pick up his prescription from Walgreens, and he has a flight to catch tomorrow morning, no way is he downloading a new app.

Bob is experiencing a very low level of payments pain. The only way he might be enticed to try something new is if it’s required for some exciting thing he wants to try. He’s not using Bitcoin to pick up his prescription, but he might try it with niche things like gaming.

Unit of account. Humans are creatures of habit and this is a good example. Those neuropath ways get very worn in. Charlie is quite used to measuring value in terms of USD. He’s been doing it his whole life. Asking him to switch is like asking him to just start doing math in his head while perusing the pastries a the bakery on a Saturday morning. He’s not in the mood. It’s not happening.

And Now to that volatility issue. Dolores has plenty of payments pain while trying to run her bodega in Caracas so she might be interested in an alternative, but she also doesn’t have any disposable income. Those margins are thin and she can not weather the storm of a Bitcoin bear market.

Dolores needs a stable, wildly used unit of account. Literally feeding her family depends on it. We need a solution for Dolores. I like using stablecoins on the Lightning network. Taproot Assets is a great option there, but that’s not the only way, there are other options as well.

We have to give people what they need which is that stability. Dolores has to know that she can use the money she is earning to feed her family not just this week but next week too.

So if we understand the problem that helps us find the solution, yes? And I am wildly optimistic. We have the solutions.

We have a few more rungs to build on the ladder before we get to retail payments. We have to to go where people actually NEED a new payment option, and we have to to give them the functionality that they need. But getting past these hurdles goes in stages.

What I would love to see happen now is us pursuing the builders and the B2B transactions. Lets build for a manufacturer in La Paz that can’t send a wire transfer to a customer in Lima. We need to enable that transaction and we need to let them send that transaction, or view their balance, in USD.

That starts to break the collective unconscious understanding of Bitcoin as either a get rich quick plan or a scam. We need that killer B2B use case. Those businesses and the FinTech people that build for them are the people that will understand platform risk and chose Bitcoin. And once we get B2B, etc. actually working for real people in those niche situations, then the changed perception of Bitcoin ripples out from there.

Slowly, slowly, then all at once Alicia is buying a gallon of milk from the corner story using Bitcoin rails. And she doesn’t even know it ← that is the really important part. All she knows is that this app works and you just scan the QR code and her balance appears in USD.

Disclaimers: This post is focused on retail payments. With AI bots and online gaming, etc. we might see some Bitcoin based application really take off. Always a possibility. But other cryptos are very serious competition there and Bitcoin’s fame and success as an investment hurts us in these use cases as well. Also, humans are wildly adaptable and culture is very powerful. A big cultural push in some little corner that ripples out could always make this happen.