Bitcoin's Payment Problem Is Demand, Not Technology, Says Spiral
Bitcoin has established itself as a store of value, but it is still rarely used to pay for everyday things. That is the uncomfortable starting point of a new report by Spiral, the Bitcoin development group funded by Jack Dorsey's company Block. Published on 27 October 2026 under the title "The Long Road to Bitcoin Payments", it argues that the main obstacle is no longer the technology – it is that too few people actually want to spend bitcoin.
The technology is largely ready
According to Spiral, the infrastructure has matured considerably. The Lightning Network runs in production, and self-custodial wallets now hide most of their complexity from users. Seven years ago, building a Bitcoin payments app took more than a year and several developers; today, a working first version can be produced with a single prompt to an AI coding tool. More than one million US merchants can already accept bitcoin through Square.
The report's conclusion is blunt: "The gap is mostly demand, not technology."
Why people don't spend their bitcoin
Spiral groups the obstacles into three areas:
- Demand: Most holders prefer to save their bitcoin rather than spend it, and merchants see little reason to promote a payment method their customers rarely ask for.
- Volatility and competition: Price swings make it hard to price goods in bitcoin. Dollar stablecoins already meet the need for stable digital payments – and they are winning the integrations. Stripe, Shopify, PayPal and Visa are building stablecoins into their products, and Spiral estimates that around 99% of payments over Coinbase's x402 protocol for AI agents are made in the stablecoin USDC.
- Policy: In the US, every purchase with bitcoin counts as a disposal that can trigger capital gains tax, which makes small everyday payments cumbersome.
Four ideas for the next five years
Rather than incremental improvements, Spiral is asking for bigger, bolder ideas. The report outlines four directions:
- Shared rails: Lightning infrastructure that carries both bitcoin and dollar payments in the same apps, with a clear reason to choose bitcoin.
- Payments for those who need them most: Self-custodial bitcoin payments for people facing unstable currencies or capital controls.
- New reasons to spend: Incentives such as discounts or rewards for existing holders – measured by whether people keep paying once the incentives end.
- New ways to spend: Micropayments for creators, computing or AI services, paid per use. As the report puts it, the killer app for micropayments "probably won't feel like a traditional payment at all".
Where everyday Bitcoin use already works
The second idea is the most interesting from a global perspective. In countries with high inflation, capital controls or weak banking access, bitcoin is not just an investment but a practical tool. Our recent report from the Africa Blockchain Festival in Nairobi showed exactly this: where moving money across borders is slow and expensive, demand for alternatives exists. Spiral's report suggests that the next wave of Bitcoin payments is more likely to start there than at a coffee shop in San Francisco.
A reply in the Delving Bitcoin discussion added a practical point: many users don't know whether a payment is made on-chain or via Lightning, and unexpected fees or delays scare them off. The suggestion: "make the first payment boring" – with clear labels, fees shown before confirmation and recovery instructions that also cover Lightning funds.
An open invitation
Spiral describes the report as a living document. Developers, payment providers and funders are invited to contribute ideas and, above all, data – for example on payment volumes, repeat usage and transaction success rates – via GitHub, X and Delving Bitcoin. Dorsey's own benchmark sets the bar high: if bitcoin becomes a currency people can use every day, "it's succeeded"; if it ends up as digital gold only, "it's failed".
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