Hmm Really interesting replies here. as OP, I think i actually mislead the conversation from the start with the thread title. What I was hoping to do here was identify the development frontier of Bitcoin at this current time.

Things like volatility are a social behavior phenomenon that is influenced with the current levels of technology readiness and community implementation. I guess it will stabilize when the environment allows it to do so. But I do not see any development initiatives that will reduce volatility in of itself.

Education is an interesting point.

I personally feel that there is a lot of obstacles in the form of misinformation for people getting their toes wet in Bitcoin and cryptocurrency.

Also, the fact that there is a lot of third party services like exchanges that are not regulated by any community representative body. I think this is a big step towards gaining consumer confidence. For instance, as far as I know, no exchanges are audited for their trading volumes or clearing house algorithms.