Cryptocurrency Adoption: How Do We Onboard the Remaining 99%?

However, in reality the cryptocurrency arena is still anything but minute in comparison to the traditional financial sector. Whether you base these disparities on daily users, market capitalization, or reputation –  cryptocurrencies clearly still have a long way to go. With that being said, this article seeks to explore what the ever-growing digital currency industry needs to do to truly achieve global adoption on a scale large enough to challenge the status quo.

Daily Users

The first, and potentially most important factor that will determine the long-term fate of cryptocurrency adoption is daily usage. In other words, if and when the blockchain asset arena achieves global adoption, it could be heavily dependent on consumers using cryptocurrencies like Bitcoin to pay for everyday goods and services. In this sense, the first barrier to entry is experienced by those entering the market for the very first time. While it is true that a number of third-party exchanges now allow you to purchase digital coins with traditional payment methods, these platforms are not only still in their infancy, but they operate largely in an unregulated environment. Nevertheless, as more and more well-known and credible institutions start to offer cryptocurrency buying and selling services, trust will likely follow. One such example of this is the UK-based money transfer company Skrill. Launched almost two decades ago, the hallmark institution recently entered the cryptocurrency space, subsequently allowing everyday consumers to easily purchase a number of digital currencies at the click of a button. On top of its long-standing reputation and ease at which users can utilize debit/credit cards, bank accounts, and other payment methods to deposit and withdraw funds – Skrill is authorized by the UK’s Financial Conduct Authority (FCA). A further point that is often mentioned in the discussion of consumer adoption is the benefits that cryptocurrencies yield in the event of a financial crisis. At a domestic level, one only needs to look at how citizens of Venezuela have responded to the South American country’s economic woes. In a nutshell, with the Venezuelan Bolívar set to reach hyper-inflation levels of 10 million percent this year, Bitcoin usage within the country has sky-rocketed.

Market Capitalization

Optimists are certainly correct when a comparison is made between the value of cryptocurrencies today, against that of the industry’s initial few years. For example, at the time of writing, the cryptocurrency industry is worth a collective $270 billion in market capitalization. While this is significantly lower than the industry’s 2018 all-time high of $800 billion, it is important to remember that in 2013, this stood at a little over a billion dollars. As impressive as these growth levels have been, this is still an amount substantially smaller in comparison to traditional assets. For example, even if we were to take the cryptocurrency industry’s all-time high of $800 billion, this is minute when you consider the $8 trillion and $30 trillion market capitalizations of Gold and the US stock market, respectively. This is why influencers within the cryptocurrency arena must utilize the platforms they have at their disposal to educate the masses, and thus, encourage new entrants to enter the market. The true fact of the matter is that the masses still don’t fully comprehend what Bitcoin is, where it comes from, or what it can do. Essentially, the industry needs an abundance of cryptocurrency evangelous like Andreas Antonopoulos. Antonopoulos is behind a number of books, articles, videos and presentations that seeks to explain Bitcoin and blockchain technology to everyday consumers. Essentially, once the masses are more educated on cryptocurrencies, market capitalization will arguably follow.

Reputation and Recognition

Those with little to no experience in the cryptocurrency arena are known to utilize terms such as ‘Scam’, ‘Fraud’, or ‘Pyramid Scheme’. This is understandable, especially when one considers the somewhat murky reputation that cryptocurrency exchanges still have. In fact, it was recently reported that since the industry’s inception, more than $1.5 billion has been hacked from exchange platforms. This has consequently resulted in the cryptocurrency arena acquiring a negative reputation in certain demographic sectors and thus, hindered the industry’s ability to gain global adoption. However, the industry’s reputation has taken a very quick turn for the good in recent years, not least because a significantly number of established institutions have since entered the space. Whether it’s the likes of Skrill, JPMorgan Chase, or IBM – institutional involvement is now much more than just ‘interest’. Take global social media platform Facebook for example. The platform – which is now used by more than 2 billion people worldwide, recently announced that it would be launching its very own cryptocurrency – Libra. This in itself is excellent news for the cryptocurrency industry’s reputation. When skeptics of the industry see global institutions that they know and trust enter the market, it will eventually lead to a complete reversal in sentiment. In the long-run, this is one of the key factors that will eventually lead to cryptocurrency adoption by the masses.

The Bottom Line?

In summary, it is certainly true that the cryptocurrency industry has come a long way since Bitcoin was launched in 2009. Nobody could have predicted at the time just how big the industry would have grown in a mere 10 years. However, there is still a very long way to go. For cryptocurrencies to get anywhere near the type of adoption levels experienced by the traditional financial markets, it needs to address three key factors. Notably, this includes daily usage levels, market capitalization, and an ever-increasing reversal of its negative reputation.

---

Full Disclosure: This article is a guest submission and was not authored by BeInCrypto or its staff. We have chosen to publish it because we feel it may be of interest to our readers.