Bitcoin - consumer's perspective

Working on the front line of IonTec Software LLC is a lot of fun. Some time ago I was helping one of our customers to navigate through industry buzzwords and see if they could improve their business processes by implementing some of the new technologies. One of the technologies in question was a block chain. They were wondering if and how they could implement it to improve their business. All of those conversations reminded me of the Bitcoin and inspired me to write this post, where I'd like to take a look at the Bitcoin(BTC) from consumer's perspective.
Let me set some boundaries: I am not going to talk about investing in BTC, because I am not a professional investor and it looks to me like a giant speculation. So you potentially may score a something on short-term deals, if you have a sizable amount of assets to risk with, because, most likely, price will go up as it becomes more and more popular and it will. However at the end of the day, BTC is just a cryptocurrency, so I put it very simple, why would you invest into a currency, even if it is the currency of the future. Also, I am not going to talk about mining, as it's being talked everywhere and it's not really practical or profitable especially here in the US, as it requires expensive hardware to start with and uses a lot of electricity, which quite expensive. However, it might be reasonable for some countries where electricity is essentially free.
What I'd like to talk about today is to take a look at BTC from consumers side of the world. The premise of the Bitcoin is quite simple and compelling, it would allow almost instantaneous transactions between parties with a low fee, like peer-to-peer transactions. Think about transferring money abroad for one reason or another, it may cost a fortune to wire money and you'll have to wait at least 3 days for the transfer to appear on the other's party account. Replacing all of this with BTC transaction sounds way too nice, right?
Let's take a look at transactions part deeper. Today we have about 7.5 billion people on our planet. So what if those people will start to transact on BTC network, what if even half of those will? Surely it will create a lot of transactions. A quick search on a number of transaction that VISA network is handling per second will give you a magic number of 4K transactions. So how much is BTC capable of? Well ... apparently, there is a limit of 7 transactions per second, just 7! As it's not yet ready to conquer the world, let's look at the more local approach. Let's try to estimate what's the volume of transactions here in the US. Another quick search and we will arrive at magic number 35 which is the average number of orders per second for Amazon, but there are other retailers with a similar volume. Which means that BTC is not capable to become our daily driver here, at least not for now. I have to mention that Bitcoin's wiki has an article about some proposal which will supposedly bring network to at least level of VISA with their 4K transactions per second and I hope they will find the way to improve that area, but until that happens, waiting for 10-20 min at my local coffee shop while paying with BTC is not going to happen.
Enough about transactions, let's move to another aspect, its openness. All transactions recorded and tracked by everybody on the network. People would argue that it anonymous and because it's anonymous it's fine that everyone sees transactions. Well, in reality, it's pseudo anonymous or it's anonymous until there is no association between the person and a signature which is visible for the entire network. Now let's think ahead, the network is public, so everybody can see all transactions, right? Imagine what a privacy nightmare it's going to create if, say, pizza shop, where you used your hard-earned bitcoins and provided delivery address plus your name, got compromised. Given, that national chains can't deliver good products and people would rather order pizza from a local shop, which may not have money of a large corporation to improve their cyber security, it's totally possible. Then just imagine options for targeted advertisement, if one of the advertisers can associate the name to a signature, and profile person's spending, learn about habits, like pizza delivery on Friday night. With today's advancements and growth in artificial intelligence that type of data is very dangerous. I am not even talking about bad guys and how they can use that type of information. While paying on the network you have to think twice on what information traces you leave, because once someone can associate the name to a signature a lot of things possible.
Based on those 2 items I think that Bitcoin is not yet consumer ready, however, a potential is there and especially as a lot of innovation going on in that sphere and one day one of those cryptocurrencies would be able to take on consumer space and get rid of payment processing networks, a.k.a the middle man.

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