Users will need to be able to get a credit limit with Bitcoin. This also needs to be reported to some credit bureaus. For Bitcoin to succeed, there will need to be some 3rd party agency that offers services similar to credit cards. People want a spending limit of money that they can pay back by the end of the next 30 day billing cycle just like they do with credit cards. They want the 60 day grace period on their balance they don’t have to pay interest right away. This is a major blocking factor for Bitcoin to go mainstream. Once a reputable company can provide users that have good or excellent credit with a spending limit, then this barrier will be broken. This would open the door to thousands or even millions of new users.
With Bitcoin, you will not, anytime soon, get the same 0% APR for 18 months with a $10,000 limit as easily as you currently can with the major credit card issuers. People would rather spend money that they don’t have than to pay immediately with the money that they do have. Most people have debt that they would rather put that money towards so they don’t have to pay interest on it. This gets a lot of people in financial trouble, but it just the way that it is. Hopefully, there will be Bitcoin credit cards where people with excellent credit can get a 10 bitcoin credit where they must pay back just like they do with current credit cards.
People like to have their spending recorded on their credit reports. This shows to the banks that they are capable of repaying a debt. If someone only used bitcoin then they could not build a credit history that is widely accepted as a verification of a users agreement to pay them back. If there was a serious credit agency that could be listed at the end for specifically bitcoin credit history, then this would provide for a major breakthrough. Bitcoin could allow for an effective international credit reporting agency.
It would be possible to give someone a credit limit in US dollars and allow the user to convert it to bitcoins as needed. This could then be reported to the the standard credit reporting agencies.
There is a company called BTCJam that allows users to lend their bitcoins to other users. The borrowers will repay the bitcoins they borrowed plus an agreed upon interest rate. The credit history is internal to the system. The borrowers will have their online profiles like Facebook & PayPal verified. They also allow them to have a credit card and checking account that can be verified. If a user has all of these verified, they should be more trustworthy.
However, this does not meet the requirements of what is needed for Bitcoin to go mainstream. They need a serious player that will verify credit history on their credit report and report spending to the credit reporting agencies.
An identity could be linked to a wallet and a users spending could be made available to creditors. A 3rd party app that allowed a user to report their wallet address to their identity and gave it to creditors upon request and approval is an interesting concept.