Hurdles To The Cryptocurrency Adoption Part 1
[ Opinion ]
This article is full of highly charged opinions. Unlike blockchain technology, we will look into the world of cryptocurrencies — a subset or by-product of Blockchain. It will extenuate opinions from different viewpoints. We understand that proponents of cryptocurrencies may not agree with us. Kindly read this with an open mind and if you have a strong opinion, feel free to write to us. We accept all forms of opinions — whether you’re a proponent or opponent of cryptocurrency.
Interest in cryptocurrency is booming. Thanks to Bitcoin once again and Ethereum. For those who have no idea what cryptocurrency is, we suggest you look it up before continuing on with this article — otherwise you may understand certain portions. You may understand what cryptocurrency is — but will it find a common understanding in today’s payment ecosystem and beyond?
Cryptocurrency has been gaining loads of attention from recognized institutions and governments. Some positive and some negative. For instance, the China CPC government has banned Initial Coin Offering (ICOs), the South Korean government has banned cryptocurrency altogether, the US government has an “official” dedicated stance on it. The Federal Trade Commission (FTC) has stated –
“Cryptocurrency is digital money. That means there’s no physical coin or bill — it’s all online. You can transfer cryptocurrency to someone online without a go-between, like a bank. Bitcoin and Ether are well-known cryptocurrencies, but new cryptocurrencies continue to be created.
People might use cryptocurrencies for quick payments and to avoid transaction fees. Some might get cryptocurrencies as an investment, hoping the value goes up. You can buy cryptocurrency with a credit card or, in some cases, get it through a process called “mining.” Cryptocurrency is stored in a digital wallet, either online, on your computer, or on other hardware.”
More information can be found here.
Not all is bad news. Major banks globally have started to accept some form of cryptocurrencies. Allowing withdrawals directly to bank accounts from cryptocurrency exchanges is a good indication of adoption — albeit slowly. Although controlling and regulating cryptocurrency is still near impossible (without drastic measures like outright ban), Governments and banks have also started to invest in cryptocurrency and looking at ways they are able to find common grounds with market forces.
This very lack of control is one of the many reasons slowing down the cryptocurrency adoption rate.
Inability to control
When the locus of control is dependable almost totally on external factors, it will give rise to an innate fear that one might lose control. This is happening and affecting governmental institutions globally. Without any major government authority behind cryptocurrency, it is hard for cryptocurrency to gain a foothold in the general market. Major banks and organizations would not outright promote or endorse it.
These are two (2) very important stakeholders that cryptocurrency adoption requires. Until these stakeholders openly announce their position on cryptocurrency, cryptocurrency would still remain in the shadows for the time being.
If you’re interested to know why the “inability to control” factor has ripple and far-reaching effects, do let us know and we might do a whole new article dedicated to it.
One of the main reasons why there is a lack of adoption is more psychological than compared to other factors. We look at the far-reaching domino effect it has. A simple lack of understanding among the general market gives rise to consequential effects.
Lack of understanding
The simple majority do not know what cryptocurrencies are and how they actually work. When there is a lack of understanding, distrust sentiments rises and barriers toward cryptocurrency increase. They are not totally to blame as proponents of cryptocurrencies are conflicted with another important psychological issue — Wilful ignorance (a beautiful way to conceal selfishness)
Many who are speculating on cryptocurrencies are guilty of expressing some forms of wilful ignorance, secretly wishing not many invest in the “secret” that they hold, hoping that the prices rise and reaping the benefits from it. If it goes too mainstream, they are afraid to market forces will even the playing field.
Although this factor may not actually hold out or affect the adoption rate of cryptocurrencies, this is a fun fact to include. Whether you agree with this or not is irrelevant. There is an innate nature that exists in all humans. While it may not apply to all, it certainly applies to the simple majority.
Lack of trust
The lack of understanding begets trust issues. For cryptocurrency to gain a foothold in everyday life, there has to be an intricately linked consensus among the majority of stakeholders — namely Governments, regulators, influential institutions (banks), and the general public. Lack of trust in any stakeholder breaks the chain link in the ecosystem required for cryptocurrency to play a part in our everyday life.
End of Part I
In part II of this article, we look at how the hurdles today may determine the future of cryptocurrency and discuss the possibility of potential discourses. We will also give our stance on this topic.