Fred Wilson was one of the earliest investors in Twitter and Tumblr. His venture capital firm, Union Square Ventures, was also one of the earliest to get into Bitcoin. Yet he admits that there is still much work that needs to be done before Bitcoin can be useful to the average consumer. So said Wilson in a talk at New York University, sponsored by the NYC Foundation for Computer Science Education.
Bitcoin needs to clear two key hurdles. The first is that still difficult to get hold of Bitcoin, quickly and easily. He pointed out that with the exception of students whose attendance was sponsored, tickets to the event can only be purchased with Bitcoin. He got e-mails of complaints that it will take 3 days to buy the coins.
It should be pointed out that companies like Expresscoin and Bittylicious have set out to solve just that, adding multiple payment methods like credit card. It could just be a matter of education, although the point can be debated.
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Part and parcel with the argued difficulty in buying is the lack of liquidity. People are sitting on them as investors more than spending them as they would with real currency. This contributes to volatile price movements, which in turn continue the vicious cycle by making Bitcoin less appealing to common users:
“…if there was a very vibrant system where Bitcoin was just getting swapped around like crazy, the velocity of the money would cause Bitcoin’s price to stabilize, and there would be a much more liquid market.”
The second hurdle is security. Bitcoin stored on your computer is an easy target. Again, a point worth debating considering the recent focus and innovation on this front by several companies. Indeed, Wilson says that this is a huge area of opportunity, “the first big commercial opportunity for Bitcoin.”