A new report from Juniper Research has found that the number of active Bitcoin users worldwide will reach 4.7 million by the end of 2019, up from just over 1.3 million last year.
However, usage will continue to be dominated by exchange trading, with retail adoption largely restricted to relatively niche demographics.
Although a number of high profile retailers are enabling Bitcoin payment, “activity levels from both online and offline deployments are extremely low”.
The report also found that average daily transaction volumes have increased by around 50 per cent since March 2014 but report author Dr Windsor Holden said this is a result of higher transaction levels by established users rather than an increase in consumer adoption.
One reason for this could be difficulty in communicating the concept of cryptocurrency payments to end users.
What’s more, users often associate Bitcoin as a means for criminals to make illegal purchases and for money laundering, and this could be a deterrent to mass adoption.
Another problem could be on the supply side: the report says that “with many Bitcoins being hoarded by early speculators, currency supply could be further restricted with Bitcoin mining profitability threatened by a combination of the cryptocurrency’s volatility, lower Bitcoin yields and rising electricity costs.”
Last year, Jon Matonis, executive director of the Bitcoin Foundation, had predicted that Bitcoin’s success is built on bypassing traditional authorities in the finance world and could perform the same trick for mobile money and payments.