Crypto fails as money and what needs to change

In December 2024, the price of Bitcoin (BTC) exceeded $100,000 for the first time. This surge was driven by optimism about the pro-crypto US administration and marked a historic moment. But despite the excitement, it highlighted ongoing problems. Cryptocurrency is not yet ready for everyday use.

Bitcoin and other cryptocurrencies are popular as investments, similar to stocks, or as some experts call them. Bitcoin is “digital gold.” But when it comes to being used as real money, they fall short. High fees, slow transactions, and often complex systems make Crypto impractical for most people. If the industry wants to see mass adoption, it needs to focus on fixing these issues and making crypto easier to use and more accessible to everyone.

Old blockchain systems are holding crypto back

When Bitcoin was launched, its decentralized design was revolutionary. It showed the world a new way to secure and transfer money without relying on banks, which are prone to dependence on external factors such as inflation and geopolitical constraints. But more than a decade later, that original system is struggling to catch up.

Bitcoin’s block creation process, which occurs every 10 minutes, limits the number of transactions that can be processed. During busy periods, rates may increase and confirmations may take longer. This makes using Bitcoin for small everyday payments inconvenient and expensive.

L2 solutions like Lightning Network try to make Bitcoin faster and cheaper, but such solutions still rely on the same slow base layer. This means that the core issue remains unresolved. As a result, Bitcoin is primarily used as a store of value or investment rather than as a way to pay for everyday goods. For crypto to be widely adopted, it will need to move beyond this fundamental limitation.

Crypto needs to scale for everyday use

If cryptocurrencies are to work as money for everyone, they need to scale up in a big way. Today’s major flagships such as Bitcoin and Ethereum (ETH) cannot handle the amount of transactions required for a global payment system. Congestion and high fees make it impractical for daily use.

On the other hand, traditional payment systems such as Visa and MasterCard easily process millions of transactions every day. Crypto will need to match or exceed this level of performance to compete. Small improvements are not enough. The industry needs bold new designs that can handle high transaction volumes without breaking a sweat.

Without this kind of scalability, Crypto will remain stuck as a niche tool. Good for speculation, but not good for replacing traditional financial systems.

Hybrid model and the case for stablecoins

One way is to use a hybrid system that combines the strength of cryptography with the stability of fiat money. Stubcoins tied to fiat currencies like the US dollar are already showing promise. They offer crypto speed and privacy while avoiding the price volatility of coins like Bitcoin.

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

Such systems offer users the flexibility to choose what works best for them, while maintaining the important benefits of decentralization, speed, and security.

Changing the way people view crypto

Another major hurdle to crypto adoption is how people view it. Bitcoin is often referred to as “digital gold” so people think of it as an investment to hold rather than spend. While this idea has helped Bitcoin increase in value, it has also hurt its chances of being fully integrated into everyday transactions for fewer goods.

This perception needs to change for Crypto to succeed as money. People should see it as a tool for everyday transactions, whether they’re buying coffee or sending money overseas. This requires not only better technology, but also increased communication and transparency from the industry. The message must be clear. Crypto is simple, reliable, and ready for real world use.

the road ahead

Of course, the industry needs to consider that while riding out price increases, the industry remains focused on speculation as the stock market. In that case, the industry and crypto will not reach its full potential and will remain as a niche tool. But if priorities shift to practical solutions, Crypto could truly become the future of money.

The road ahead will not be easy, but the goal will be worth it. Crypto not only requires new technology, it requires new thinking. The question is not whether crypto can change the world. The question is, are you ready to make it happen?