Cryptocurrencies are revolutionary. Yet, adoption isn’t happening as quick as many anticipated.
They offer quicker speed. There’s no middleman. There’s lower cost.
Yet numerous factors are holding them back from mass adoption.
Five Major Problems Preventing Mass Adoption
For one, a vast majority of people can’t even explain what a cryptocurrency is, or even how it works. It’s not likely that so many people would ever feel comfortable using anything other than a trusted bank. Cryptocurrencies are considered more suitable for the tech-savvy people that understand the importance of digital security and how to effectively apply it.
Two, the market is still unregulated. This is both the great appeal and the ultimate Achilles’ Heel to cryptocurrencies. Individual sophisticated investors and institutional investors alike are gun shy with risks. In a regulated environment depositors feel safe from theft or loss of their money. That’s because to some extent, it’s insured and protected. The cryptocurrency environment, on the other hand, is based on a trustless system.
Three, the scam factor still exists with Initial Coin Offerings (ICO). Global governments are attempting to crack down on this, though. In fact, some are creating regulatory groups to tackle the issue. Unfortunately, we must still contend with issues such as Bitconnect, the latest example of a Ponzi Scheme.
Third, volatility has made many uneasy.
For Bitcoin to function as a means of payment, it needs stability. At the moment, that doesn’t exist. It can price at $6,00o one day, and $6,500 the next. Such volatility outstrips all other currencies. We also have to consider that Bitcoin is a form of money with fixed supply on its own blockchain, with no central bank to cut off supply if needed. That makes bitcoin inherently prone to volatile price swings.
Fourth, cyber crimes and hacking issues with exchanges and accounts has made some investors uncomfortable, too. Investors that bought into Mt. Gox for example, lost everything years ago.
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