Blockchain technology and the cryptocurrencies that run on it are incredibly transformative technologies. However, just like all technologies that preceded them, generating widespread adoption is a challenge. A recent survey by Deloitte revealed that people are growing tired of hearing about blockchain every day. However, that is not what is slowing cryptocurrency adoption. The main obstacle standing in the way of widespread adoption is the fact that most people don’t understand cryptocurrencies. They don’t understand what it is, how it works, and how it can impact their lives. This, coupled with the fact that many cryptocurrencies have been associated with scams, crime, and high volatility, makes most people steer clear of them.
Why cryptocurrencies are failing in adoption
Unregulated: Most cryptocurrencies and crypto-exchanges are unregulated and often function without any formal oversight. A lack of regulation puts investors at risk since they don’t have any of the protective measures or protocols in place that are standard for trading on regulated exchanges such as the CBOE or the NYSE. For this reason, many investors and institutions have opted out of the sector due to the risks associated with unregulated intermediaries.
Criminal associations: Cryptocurrencies have, unfortunately, become synonymous with shady dealings and criminal activity, thanks in part, to their anonymous nature and digital architecture. A great example is Bitcoin. Ever since its invention, Bitcoin has been a choice payment method for cybercriminals, especially for those using ransomware. It is reminiscent of the Silk Road, an online black-market platform that sold illegal drugs, weapons, and more using BTC. Moreover, since BTC uses mining to generate new coins, it has created a loophole for cryptojacking to take place.
Contradictions: Cryptocurrencies were created to help promote privacy, decentralization, and security. However, over the years, people have discovered that cryptocurrencies are not as decentralized and secure as they were once led to believe. They are, in fact, not safe at all, unless you really know what you’re doing. The cryptocurrency industry is riddled with unscrupulous dealings, frequent hacks, and scams. For a newbie, all these issues are enough to deter them from exploiting the cryptocurrency landscape, dashing the hopes of mass adoption.
High volatility: The truth about most cryptocurrencies is the fact that their values fluctuate far too much, far too often. Holding crypto assets for as little as a few days at the wrong time can cost an investor hundreds or thousands of dollars. Moreover, market swings are so frequent that even while waiting for a transaction to process, the underlying value of the crypto asset can change drastically. This is a reason why many retailers and countries don’t necessarily accept it as a legitimate means of payment. This is why cryptocurrencies are seen more like a speculative asset than a currency or a means of payment.
There is no technology that doesn’t come with its own set of problems. For cryptocurrencies, the problem is mass adoption, or the lack thereof. Sometimes, the best solution for mass adoption is time – time for ongoing developments to take place, for growing pains to pass, and for new and novel ways of doing things to become commonplace. A decade ago, digital currencies were a mere concept, and the same could have been said about digital payment systems such as Visa and Mastercard as little as a few decades ago, but they are now mainstream products that some people perhaps cannot even imagine living without. Therefore, the best solution to the slow adoption of crypto is time. While this may not be the sexy cure-all we might want, it is the only thing that will get us from where we are to where we want to be.
The bottom line
It will be genuinely exciting to see how the future of cryptocurrencies will play out. Cryptocurrencies are here for the long-haul, and there’s no denying their utility, but the accompanying products, services, and general ecosystem is not where it needs to be for mass adoption. There is no one single thing that needs to be done for people to start adopting cryptocurrencies, but as better solutions, cheaper ways of doing things, and more secure protocols are created, popular acceptance will follow.