The crypto movement has real hang-ups that need to be addressed before broad adoption is feasible or expected, but entrepreneurs are addressing them.
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Cryptocurrencies and blockchain may be the most popular technologies to not yet be experienced by the wider population. In the past 18 months, cryptocurrencies have attracted front-page headlines as they climbed in value, capturing attention and market share along the way. The movement became so prolific that it even made the rounds on the late-night television circuit when John Oliver aired an elongated segment covering cryptocurrencies and blockchain technology.
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However, surveys consistently show that crypto adoption is primarily concentrated among a relatively small subset of people. For instance, a March survey by Finder found that 92 percent of people haven’t invested in cryptocurrency. A similar study conducted by Survey Monkey and the Global Blockchain Business Council concluded, “A growing number of Americans — 58 percent — are familiar with Bitcoin, but far fewer are confident enough to invest in it.”
The same is true for blockchain technology. Although it’s frequently described as a third iteration of the internet, and both prominent corporations and sleek startups are investing heavily in the technology, it’s clear that blockchain is still in the early stages of adoption.
Of course, in a way, that’s exactly the state of the crypto movement. It’s still in its infancy, and new technologies can be slow to catch on. After all, Apple, which recently attained status as the first publicly traded company with a $1 trillion valuation, almost went bankrupt as consumers were slow to adopt its vision for personal computing.
Even so, the crypto movement has real hang-ups that need to be addressed before broad adoption is feasible or expected. Unsurprisingly, there are platforms already working on these issues.
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These are four of the most pressing problems hindering crypto adoption, and the companies that are actively pursuing solutions to them.
Cryptocurrencies may be compelling, but they are far from convenient. As anyone who has ever tried to use a digital currency to make a payment can attest, it’s a complicated process. The crypto ecosystem is comprised of numerous exchanges, wallets and storage platforms that are often incompatible with one another.
At the same time, using traditional currencies has never been easier. Anyone with a smartphone can text money to a friend, pay for services on an app or pay bills online. Using cryptocurrency will have to be that easy before it will see the kind of widespread adoption that its supporters are confident it will achieve.
Many services are working on making the process easier, primarily by offering crypto debit cards that can function like traditional bank cards. However, many of these products are focused on Bitcoin, leaving other alt-coin holders with little recourse for using their digital currency. One of the leaders in this service, TenX, is working to expand their offerings. TenX co-founder Julian Hosp recently explained, “We started in 2015 with the mission to make bitcoin spendable-changing it last year when we saw the demand to making cryptocurrency, in general, more spendable, we’re going to be adding more along the way.”
Related: Blockchain Could Be a Powerful Tool for Shrinking Pervasive Global Money Laundering
Cryptocurrencies are a uniquely volatile asset. It’s not uncommon for even the most prominent currencies to fluctuate by double-digit percentages in both directions in a single day. This makes it extremely challenging for consumers to consider using digital currencies to make purchases.
As Ethereum co-founder Vitalik Buterin recently pointed out on Twitter, most crypto enthusiasts are preoccupied with the investment vehicles like ETFs rather than on usability. In his assessment, these pursuits cause crypto markets to fluctuate, but they don’t make it easier to use digital currencies, which is, in most cases, their intended purpose.
Therefore, several platforms are striving to provide outlets for cryptocurrency usage, rather than speculating on their values. Powering industries that are uniquely improved by the blockchain is a good place to start. For example, the burgeoning internet of things (IoT) ecosystem is distinctly orchestrated to benefit from a decentralized infrastructure.
IOTW, a blockchain-based platform that enables crypto mining on IoT devices, pays users in digital currency for their mining services. With more than 20 billion IoT devices around the world, this platform represents an available use case for digital currencies. One of its first applications, the IOTW marketplace, will allow users to purchase goods and services using earnings from the platform. The IOTW marketplace is the full-circle ecosystem made possible by the blockchain, making digital currencies immediately usable.
Moreover, as the blockchain ecosystem continues to expand, the digital currencies that support them will become more usable. It’s not the same thing as buying bread with Bitcoin, but it is a way for digital currencies to be used as something more than an investment.
Related: 7 Reasons Experts Say It’s Not Too Late to Invest in Cryptocurrency
Unfortunately, the rapid proliferation of the digital currencies movement means that, at times, the proverbial cart got in front of the horse. Practically, this has manifested itself in numerous exchange hacks, currency thefts and other nefarious activity.
For many people, cryptocurrencies haven’t shed their dark web past, which creates an uninformed sentiment that they can’t be trusted. The result is a litany of influential people speaking out against digital currencies. J.P. Morgan Chase’s CEO Jamie Dimon famously described Bitcoin as a fraud, and just last month U.S. Congressman Brad Sherman called cryptocurrencies a “crock” before advocating for their outright ban.
In many ways, this is a PR problem that is assuaged as more people have a positive experience dealing with cryptocurrencies. Many prominent digital currencies such as Ripple have immediate use cases and a list of companies piloting their technology. Ripple has been able to showcase its tech to the mainstream media, gaining exposure for itself and the crypto industry and shedding a more positive light on the technology when in May, Ashton Kutcher went on the Ellen DeGeneres show to give away $4 million worth of Ripple to the host’s charity, exposing Ripple to millions of viewers and showcasing the positive aspects of crypto.
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Despite all the issues keeping people from adopting cryptocurrency, one of the hardest perceptions to contest is that it’s not a tangible asset and therefore, has no tangible value. There are no physical Bitcoins that someone can hold, and although most people complete a slew of digital transactions every day, the notion of using just the idea of money rather than fiat money can be unsettling.
Some platforms are already trying to bridge the gap between the real-world financial system and the digital ecosystem inhabited by cryptocurrencies. In addition to providing a useful service on the blockchain, platforms with actual use cases can be a stepping stone for those trying to acquaint themselves with cryptocurrencies. By personally experiencing their effectiveness, they may be more likely to use them more broadly in the future.
The problems slowing crypto adoption are real, but the advantageous work of innovative and empowered startups is helping assuage those concerns. In the end, it seems likely that the crypto ecosystem will play an increasingly prominent role in global economy. Old problems will be solved, new ones will emerge, creative solutions will mature and advance cryptocurrency and blockchain technology until the next great platform comes along.