Kim Dotcom recently announced a relaunch of Megaupload that integrates bitcoin micro-payments with a system called Bitcache. The new version will allow users to monetize file sharing with small bitcoin payments.

Megaupload 2.0 is set for release on January 20, 2017. Kim claims that his new site could potentially boost bitcoin user adoption to100 million and bring the price to over $2K per coin.

Let’s explore this possibility to see if it holds any merit.

3 Problems Hindering Bitcoin User Adoption

Although bitcoin has been around for over 7 years and is talked about frequently in the mainstream media, its adoption rate is still fairly low. There are three main reasons why people might be deterred from using Bitcoin.

Complexity

Although Bitcoin wallets and services are more streamlined then they used to be, the complexity level is still much too high for the average person. Most people want their technology to be conveniently easy to use and get overwhelmed by anything that looks too complicated.

Bitcoin introduces a whole new set of terminology and procedures that are unfamiliar to 99.99% of the world’s population. It takes a certain level of passion and dedication to become a proficient user, which makes Bitcoin a self-selecting meritocracy.

Security

The average computer user is fairly careless when it comes to internet security. I’ve seen many Mac users who haven’t even turned their firewalls on because the factory setting turns them off as a default.

Most users don’t understand the value of keeping their computers secure because the risk of loss for them is minimal. This attitude is quickly punished in the Bitcoin industry when users get their coins stolen. It takes a certain degree of effort and due diligence to keep your private keys safe.

Utility

They say that necessity is the mother of invention and Bitcoin helps solve many problems. That said, the average person in the western hemisphere seems perfectly happy with their insured credit cards and bank accounts.

The underbanked areas of the world that need Bitcoin the most tend to lack the infrastructure to maximize its full utility.

Why BitCache Could Solve These Adoption Problems

Using bitcoin for micro-payments introduces a whole other level of utility that could help solve the problems that new users face. Technology adoption is about creating new behavioural habits for the average user.

It’s difficult to replace people’s banking habits with a new form of money that’s risky and complicated. Rewarding those same people with a small financial incentive for using services that are already integrated in their habits is playing the game on a whole new level.

Most people are familiar with cloud storage and file sharing. Monetize these everyday services with bitcoin and the average person now has an easy gateway into cryptocurrencies.

The initial bitcoin rewards for file sharing will likely be so minuscule that the fear associated with security will be minimal. There won’t be much to lose for trying it out and the barrier to entry will probably be quite low.

Most crypto projects are extremely niche and unknown to the masses. Megaupload on the other hand has strong brand recognition, a marketing machine and a list of over 100 million users.

Potential Impact on the Markets

Introducing 100 million people to bitcoin can have a twentyfold increase in user adoption. Most of these people may not bother using bitcoin beyond micro-payments but even if 5-10% decide to seriously invest it could increase buying pressure on the exchanges.

Also if BitCache becomes a success it will set a precedence in the industry and we could see other companies following suit. Machine payments could be the wave of the future and bitcoin is the perfect currency to accommodate such transactions.

Using bitcoin as a payment system for cloud storage and file sharing just might open up Pandora’s box for the machine economy. This could create an entirely new subset of the economy by monetizing digital resources such as storage, bandwidth and data.

I won’t speculate on an exact future price of bitcoin but its obvious that the more people who use this scarce digital resource, the higher its value will be.