member
Activity: 104
Merit: 10
Your title asked for one but here are several problems I see. Many of these will be overcome with time but for now I think they are holding it back.
Acquisition - Too difficult to get (fiat => Bitcoin, Bitcoin => fiat)
Trust - With exchanges being hacked or acting as Ponzis, trust is a very big concern. Someday, perhaps, exchanges will be unneccessary but for now, there are no laws or oversight like there are with banks. If you're going to trade fiat for Bitcoin, you're going to have to trust them, whether it is Mt. Gox, Bitstamp, or the next company that hasn't yet hit the news. You could buy locally. Although a personal exchange is probably safer because you're there, there is always the possibility of being robbed so you're going to have to trust them.
Security - I just read about cold storage being hacked this morning. I worry that my smartphone could be lost or hacked. I worry that there could be a keylogger on my PC. I get an uneasy feeling everytime I login and spend some Bitcoin. I worry if I keep a backup on a piece of paper somewhere that it could get lost, stolen, burnt up in a fire, etc.
Education - I think we are, compared to the timeline of the Internet, in the early days of computing where getting on and using the Internet was easy for a few. But most people didn't know what a modem was, how to install it, how to use it, what a BBS was, how to find a POP, what the Internet was useful for, how to use a BBS or even a browser. The average user just found it all too difficult. Today, I think the biggest challenge the average person faces is understanding best practices such as creating a password they can remember, yet is difficult enough. Or how to keep a backup. Or how to generally be safe and secure and get a warm fuzzy feeling whenever they use Bitcoin and not a very uneasy feeling that they could be doing something wrong and may someday find their life savings has been liberated from them and there is no one (FBI, FDIC, etc.) they can turn to to get it back.
Confirmation times - 10 minutes to an hour is not a problem for many online transactions but there are circumstances when that wait is just too long, especially with in person transactions.
Taxation - Either you shirk your responsibilities to pay taxes on your gains with Bitcoin and hope you never get caught or you somehow have to keep track of it all and try to reconcile your taxes. Either way it sucks.
Stigma - There is a lot of bad stigma when it comes to Bitcoin. People correlate Mt. Gox being hacked to Bitcoin being hacked, obviously not the same thing. Or they think it is only useful for nefarious purposes, i.e. Silk Road. Or they think it is just some Ponzi scheme designed to part suckers from their money. People also used to think the Internet was only useful for watching porn. They'll come around, eventually.
Volatility - Why would someone spend their Bitcoin today when they think it will be worth more tomorrow and more the day after that? Holding Bitcoin for any length of time would be an issue for most people watching the price go up and down. If they only plan to hold it for a short term so that they can spend it then volatility is moot. But, see point #1 above. When it is too difficult to convert one to the other then it becomes too difficult to buy and spend it fast enough to not be affected by the volatility. I think volatility will someday not be so much of an issue once Bitcoin is mainstream but it will be a long and rocky road getting to that point.
Investor mentality - There are plenty of reasons to USE Bitcoin. Here is just one example. A worker in America collects a paycheck every other week and wants to send a portion of each paycheck back home to his family in India. As soon as his money is reconciled in his bank account, he buys some Bitcoin from some provider where his price is guaranteed from the moment he bought it (even though it may take a few days to actually receive the Bitcoin). As soon as he gets the bitcoins he sends them off to his family and sends an email to notify them of the transaction. As soon as they receive it, they sell those bitcoins to a provider who guarantees the price at the time of the transaction (even though it may take a few days for their fiat to get into their bank account). Here is a person who is using Bitcoin for one of the many things it is good for and who is completely unaffected by the current price (whether $1,000 or $100 is completely irrelevant in this case), and is minimally impacted by volatility. He may have gained or lost a few dollars during the whole course but he could gain or he could lose. It would average out vs. sending the money via a moneygram or wire transfer where he is guaranteed to spend a lot of money for each transaction ($50 at my bank to send an international wire transfer). But many people today buy Bitcoin strictly as an investment vehicle (I'll admit I am hodling too but I don't jump on the bandwagon when the price starts going up and panic when it starts going down either). Their speculation WILL and HAS already caused bubbles in Bitcoin. Every time the bubble bursts it is a black eye for Bitcoin as a whole and the idiots say, "I told you so". Hopefully someday Bitcoin will find its value and hold a somewhat stable price causing people to stop wanting to invest in it so much. But people will ALWAYS speculate with Bitcoin, unfortunately.
Threat to current money businesses - I believe Bitcoin is already at war with the central banks and other money businesses, such as credit card companies, payment processors, the IRS, etc. They perceive it as a threat to their business and they pull a ton of power in goverments around the world. They will try to use propaganda and laws to prevent its widestream acceptance.
