Cryptocurrency has dominated technology news headlines since its invention in 2009, but its future remains as mysterious as its name suggests.
This digital currency relies on blockchain technology and advanced encryption at its core and is touted as a safer way to pay and accept payment for online transactions. Businesses and consumers alike have been intrigued by the currency’s ability to reduce fraud, lower transaction fees (and the bank’s involvement in transactions), and eliminate processing times so that payments are made instantly.
But despite these benefits, using cryptocurrency as a viable payment method is far from being mainstream 10 years after it was first developed.
Why Aren’t People Using Cryptocurrency?
Nobody’s using cryptocurrency. Or, at least, not enough to make a difference.
BlockTower Capital’s Chief Investment Officer Ari Paul estimates that about 35 million people own cryptocurrency, which is less than one percent of the world’s population. Of these, Paul believes that only about 2 million are actively using it. “This is an incredibly tiny niche industry with very little usage and adoption,” according to Paul.
Products that are wildly successful find their fame through their users, and right now, cryptocurrency barely has any. There are a few key reasons why the technology is struggling to join mainstream spending.
It’s Too Abstract
Most people aren’t familiar with how the concept of digital cryptocurrency works, so they’re not likely to adopt it. It’s not money you can see and hold, so it scares off the majority of people who are used to tangible assets. Even though paper money isn’t as common as it used to be, thanks to credit cards and PayPal, people still associate their digital transactions with the greenbacks that used to stuff their wallets.
Most people don’t want to be forced into learning something new. Change is big and scary, and they’re not willing to step outside the comfort zone to the degree that cryptocurrency requires.
Cryptocurrency is Too Volatile
Bitcoin has experienced a rise and fall unlike any other.
Bitcoin, one of the most recognized forms of cryptocurrency, surged 2,000 percent in 2017, only to lose about two-thirds of its gains just two months later. Consumers struggle to place a hard value on the currency, which only adds to the vagueness of the concept.
Cryptocurrency Predictions for 2019
The struggle of cryptocurrency is history repeating itself. Many people were skeptical to abandon the certainty of cab service, but now, one out of three people has installed the Uber app. In 1991, the internet was a difficult concept to understand, but now, most people can’t imagine their daily lives without it.
Issues like the fact that a person’s wealth can be decimated by a computer crash or that hackers can “rob” virtual vaults must be overcome to win public trust. There’s also the paradox that as crypto becomes more widely used, the more it will need to be regulated, which erodes the foundation of its existence.
Cryptocurrency is a safer way to pay.
Adoption has been almost non-existent, but analysts believe that’s about to change. Because other industries are growing their blockchain technology adoption, including healthcare and transportation, many of the barriers associated with crypto may soon come tumbling down.
For 2019, the industry is primed for growth. Crypto firms have emerged to help users make sense of the technology and manage their digital assets. If the industry can gain enough understanding and trust, there’s no reason to believe that cryptocurrency will be going anywhere except up.
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