In 1991, the first version of the hypertext transfer protocol was published and it did one simple thing. HTTP allowed one computer to ask another computer for a page of information and receive an HTML page as a response. It was simple but for the first time, information could travel anywhere in the world for free as long as you hook up to this open network called the Internet.

Bitcoin is also a protocol that does something simple. For the first time, it allows anyone who hooks up to this open network called Bitcoin to receive a token from someone that they don’t necessarily know or trust, while knowing with certainty that the token they received isn’t fraudulent and hasn’t been double spent. That token is just a store of value so it can represent currency, it can represent property, or shares, or voting rights, or a million other things that we can’t even imagine.

In 1991, no one knew that HTTP would lead to a device that lets you hail a driver, watch that driver approach you on a live map, and then automatically pay that driver when you exit the vehicle. No one imagined it, but a company called Uber lets you do exactly that thanks to all the layers that we’ve built on top of HTTP over the past 20 years.

Bitcoin is exciting not just because it can disrupt retail payments, wire payments, remittances, and a slew of other financial services by eliminating fraud and excessive fees; it’s also because of the stuff that we can’t imagine yet, but will become possible once layers are built on top of the Bitcoin protocol over the coming years. The same way that the Internet made information free for the world, Bitcoin makes fraudless transactions free for the world.

And it’s come such a long way so quickly. Over 100,000 merchants now accept bitcoin and the ecosystem has grown to around 80,000 transactions per day. Bitcoin is already saving merchants millions of dollars in credit card transaction fees and millions more by eliminating fraud and chargebacks. In 2013 alone, merchants paid around $260 billion in credit card transaction fees and lost billions more to fraud so have no doubt that there are strong incentives for merchants to adopt this technology.

The problems with Bitcoin

But while there isn’t a reason in the world for a merchant not to accept bitcoin, there are plenty of reasons for consumers not to use it. The biggest one is price volatility. The price of bitcoin often swings violently from day to day and that scares consumers. Volatility prevents bitcoin from becoming a viable currency and store of value because let’s face it – no one wants to hold a currency that can lose half its value overnight. Just ask the citizens of countries that use the USD for commerce instead of their local currency due to rampant inflation.

The reason for the volatility is simple – lack of adoption. The 100,000 merchants accepting bitcoin are a far cry from the 24 million that accept Visa and MasterCard, and while $5 trillion exchange hands on the foreign currency markets each day, the daily USD/BTC trading volume is a paltry $10 million.

The sad truth is that volatility can’t be tackled head-on because it’s a chicken or egg problem; volatility prevents mainstream adoption but it can only be solved when adoption causes legitimate use trading volumes to eclipse speculative trading volumes. In other words, when billions of dollars in global currency are traded in and out of bitcoin each day by merchants and consumers, the speculators won’t be able to push the price around the way they can now but until excessive volatility is fixed, Bitcoin will never gain mainstream adoption.

The only way to fix volatility is by solving the other major problems that Bitcoin faces – namely security and ease of use – in order to bring a new wave of users into the ecosystem. These users will take Bitcoin from the “innovator” part of the technology adoption curve to the “early adopter” part, infusing the ecosystem with more transaction volume and stabilizing the price further to make Bitcoin ripe for mainstream adoption. But why are security and ease-of-use such difficult problems? Heck, why are they problems at all?

The problems with Bitcoin wallets

The fundamental breakthrough of Bitcoin is its ability to allow two people to digitally exchange money directly with each other without the need for an intermediary. Before Bitcoin, this was only possible in the physical world with cash.

The reason Bitcoin can do this while eliminating the fraud and fees that riddle other digital payment systems is because it’s not a centralized ledger like your bank account, credit card, or Paypal account. It’s a fungible store of value just like cash so sending someone bitcoin is just like handing them some cash except you can’t counterfeit bitcoin the way you can counterfeit cash.

While this is one of the most beautiful things about Bitcoin, it is also one of the most dangerous. When someone steals and misuses your credit card, you call the bank and they (or the merchant) eat the cost of the fraud. If you lose a wallet full of cash, you have no one to call. Bitcoin, like cash, is irreversible so if your bitcoin wallet is lost, stolen, or otherwise compromised, there is no undoing what was done. Because of this, securing the bitcoin wallet is of paramount importance.

The earliest bitcoin wallets were software that ran on general-purpose devices like laptops and mobile phones. These devices are completely insecure because they are susceptible to viruses, malware, hackers, and physical theft/loss. This has led to millions of dollars in bitcoin theft and loss, and the Internet is littered with accounts that range from complex hacks to plain old spilled soda.

The next wave of bitcoin wallets moved to the cloud, running on secure servers with regular backups and improved security features like two-factor authentication. But here’s the thing – using a secure cloud wallet to send bitcoin involves a sequence of steps that looks like this: unlock phone, launch wallet app, click Send BTC, scan QR code, minimize the app, launch Google Authenticator, copy 2FA code, switch to wallet app, paste 2FA code, hit send. That’s 10 steps! Ten! The pursuit of security has created complexity and led to an extremely cumbersome experience relative to existing payment options like credit cards, destroying any incentive for the average user to adopt bitcoin.

The entire ecosystem of bitcoin wallets fails to wholly address the difficulty of using and securing bitcoin. Existing wallets operate on a spectrum where users are forced to choose between ease-of-use and the security of their bitcoin.

The future of Bitcoin wallets

Bitcoin holds the promise of a reimagined finance industry; one that tears down borders with a transparent global currency that eliminates fraud and brings accessible, interoperable banking services to the unbanked people of this planet.

The promise of Bitcoin is too great to settle or make a compromise. We must live up to that promise with wallets that achieve perfection on all fronts – security, ease-of-use, and global accessibility. It can’t be a compromise or a choice. Without that, mainstream adoption of Bitcoin is impossible.

Melanie Shapiro is the founder and CEO of CryptoLabs, which is building Case, a multi-signature hardware Bitcoin wallet. After cofounding the instant messaging company, Digsby, she went on to get a Ph.D. in Consumer Behavior. Melanie believes strongly in the disruptive power of Bitcoin and is passionate about building technology that will help Bitcoin achieve mainstream adoption.