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Nathan Kallman
Nathan Kallman

Posted on

What is holding back cryptocurrencies?

Bitcoin (and the many other blockchain based currencies) have been in continuous operation for quite some time now; successfully demonstrating impressive technical solutions to very difficult problems.

That said, the day-to-day "common" person adoption and usage of these coins as actual currency has been limited. Why do you think that is? What is "holding them back" from becoming a normal currency that I purchase my week's groceries with?

Top comments (3)

dfockler profile image
Dan Fockler

I think one aspect is cultural and the other aspect is technical.

The cultural aspect is that Bitcoin and Digital Currency is portrayed as nefarious underground currency used by criminals or as something that tech bros talk about in relation to their investments. All the scammy ICOs in the past couple of years didn't help on that front. Some of the big hacking stories didn't help either or the fracturing of the currency communities themselves.

The technical side is that what a normal person wants is a fast transaction at most businesses they go to. With fraud protection and customer support, credit cards already do this pretty well. Most businesses support credit card transactions, and those transactions are processed quickly.

From what I've read digital currencies haven't solved the problem of fast transactions or the security issues. So what do they provide that a lay person or the business owner would want? The only real edge they have is privacy and lower transaction fees. You need both a critical mass of businesses and customers in order to get things going, and digital currencies don't have that.

imthedeveloper profile image
ImTheDeveloper • Edited on

I could probably write a whole bunch for this. But, I think it boils down to a few key points.

  • As a currency BTC does the job, I'm no maximalist but outside of BTC the use case for a store of value is always a second class citizen to bitcoin.

  • Utility tokens offer very little when a simple points based system and rewards mechanism can do this job without the volatility.

  • Blockchain and decentralisation as a concept has plenty of non crypto-currency backed providers already. I'm looking here at fabric and the r3 corda platforms, who offer everything needed for the enterprise, with or without crypto, public or private.

  • There seems to be a view that everything should be decentralised. The reality is the crypto scene has missed the Trojan horse in all of this, the exchanges. These businesses act completely centralised and with their loan and interest earning products now behave just like banks.

  • For some reason there is a lot of reinventing the wheel going on. Many of the scaling issues were problems fixed 20 years ago, but crypto seems to have started over like it has never been seen before

  • "Crypto Projects" will not keep up with main stream, trusted brands who will move into the space

The future is bright in other areas, we've seen CBDCs taking the spot light.

mxldevs profile image
MxL Devs • Edited on

I don't really follow economic policy as it pertains to cryptocurrency adoption but for me it boils down to

  1. How easy is it for me to obtain the currency. How quickly could I exchange my dollars into this crypto? Will it be free to exchange?

  2. How stable is the currency? If the value fluctuates daily, would my crypto suddenly become worthless tomorrow? How do businesses set prices? Are they going to list it in dollars or crypto units? No one's going to be updating their price tags every hour unless it's e-commerce, and even then, that would be quite stressful for me as a seller.

  3. How easy is it to use the currency? Like you say, if my crypto is useless at the grocery store, no point in me carrying crypto.

  4. How easy is it for vendors to accept it? Can they just download an app and let me scan my crypto wallet and then a transaction goes through? Lots of places already have computer systems. Would the additional hardware or software be cheap?

  5. What about taxation? What are the policies in place right now for businesses that wish to accept crypto?

In some countries, credit card is super normal. In other countries, cash is king. And then there are countries that use digital wallets for everything and they pay with their phone.

I think the big issue is more related to regulations and policies. Big players also want to make sure they can get a piece of every transaction :)

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