My concern is problems with mass adoption. There are strong incentives for merchants to accept bitcoins through services like bitpay (more profit at no risk). However, what are the incentives for the masses to buy and use them?

Here is my list of the strongest pros:

1. Protection against inflation.
2. More security: independence from the banking system and government interventions.
3. Fast and cheap money transfers to anybody around the globe.

And here is how my average fellow citizen sees it:

1. What protection against inflation you're talking about with such wild price volatility? I see the risk of loosing all my money!
2. Big brother is my friend! Big brother takes care of me! All my savings in the state banks are insured by the government (in Germany at least). While with bitcoins there are lots of technical risks which I don't fully understand.
3. Paypal or Visa is even more instant and convenient, I don't have to bother funding my account at all.

Thus I don't see currently what could motivate millions of ordinary people in the developed countries to use bitcoins in everyday life. Even the marginal groups like illegal immigrants will most likely be skeptical of it, especially given the traceability of their transactions.

Further, if mass adoption won't be coming within reasonable time, current investors will eventually start to exit bitcoin, which will crush the prices and undermine the credibility of the cryptocurrency.

This pessimistic scenario doesn't take other uses of bitcoin (such as international remittance market) into consideration. But unless mass adoption will happen, other uses will also remain limited - mostly because of massive price fluctuations.

What do you think?