Mass Bitcoin Adoption as an Investment? Sure. As P2P Payment? No.

A new article in Forbes argues that Bitcoin will reach 80% adoption by 2050 based on a study by blockchain infrastructure company Blockware…

A new article in Forbes argues that Bitcoin will reach 80% adoption by 2050 based on a study by blockchain infrastructure company Blockware Solutions, which looked at metrics and trends for past revolutionary technologies.

Cryptonomist breaks out the salient numbers.

“The research revealed different rates of adoption of these technologies, but in all cases after reaching 10% of the population, growth became parabolic.

“Furthermore, Blockware predicts that the global adoption of Bitcoin will exceed 10% of the population in 2030, and thereafter its growth may become parabolic, to the point of reaching 80% of the population in the next 20 years.

“Thus, the assumption is that after 2050, Bitcoin will come to be used by four out of every five people in the world.”

This leaves so much unsaid for an outside observer of the crypto industry.

Everyone–except maybe Peter Schiff– views Bitcoin as an investment vehicle. It’s not only a hedge against inflation; it outperformed the S&P 500 by nearly a factor of 100 since January 2020 despite its decline in value since November.

And it’s highly likely because it was first to market, Bitcoin will retain legacy prominence even as the industry moves away from its first-generation model going forward, perhaps even reaching that 80% adoption rate by 2050 — but as an investment.

The problem is, by its nature, that doesn’t translate to adoption for use for daily transactions. Bitcoin’s proof-of-work protocol can never handle the throughput needed to serve as a daily P2P payment vehicle, delivering on the promise of decentralized finance and disintermediating the old banking systems.

Bitcoin can only process 5–7 transactions per second. For perspective, MasterCard manages 5,000. Bitcoin will simply never scale to what is needed for daily transactions.

Yes, you can argue that there are L2 solutions for Bitcoin that could amp them up to a potential 100,000, such as the Lightning Network, but even supporters admit you’re inviting the risk of centralization, putting more control in fewer hands in its hubs. We think this could serve as a major disincentive to the core value of decentralization, especially when better proof-of-stake networks are available.

Proof-of-stake networks like Silvermint can scale up to that and more, and they have low latency along with the security necessary for global payments at a much lower amortized cost.

This PoS scalability is what is required to compete globally with centralized finance in both general commerce and simple P2P payments. That’s the future of crypto.