Created in 2009, Bitcoin was heralded as the world’s first cryptocurrency – a digital form of currency that exists only in electronic form. Thus, there are no physical banknotes or coins. But over the past 16-plus years, Bitcoin – along with other cryptocurrencies – hasn’t really caught on as a popular form of currency. According to the Federal Reserve Bank of Kansas City, only 1.9% of U.S. consumers use cryptocurrency as a form of payment.
In a 2024 survey by the Pew Research Center, 63% of Americans say they have little to no confidence in the safety or reliability of cryptocurrency. Conversely, just 5% said they are either extremely or very confident. Traditional currencies, like the U.S. Dollar or Japanese Yen, are considered centralized currencies. Each nation’s central bank, such as the U.S. Federal Reserve, establishes monetary policy and manages the supply of money in their financial system.
Perhaps the greatest challenge for cryptocurrencies is their price volatility. Within a single day, Bitcoin’s price can quickly rise or fall by 5%-15%. In the 12 months from November 2021 to November 2022, Bitcoin’s price fell 76%. In the world of trade and commerce, buyers and sellers need stability of currency.
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