When will cryptocurrencies become mainstream? Many would argue that cryptocurrencies are already mainstream – they are talked about constantly in the media and often at work and social events.
However, the truth is that only 16% of U.S. adults have personally invested or traded in cryptocurrencies. As a comparison, it is estimated that 56% of American adults own stocks. While there will always be a percentage of the population that views cryptocurrencies as too risky, there is still a long way to go before cryptocurrencies have the same penetration as equities.
Cryptocurrencies will become mainstream when investors view all aspects of trading and holding cryptocurrencies as safe, accurate, and continuously operational without errors in settlement or account balances. And, of course, when people stop hearing stories of crypto holders forgetting passwords and losing tons of money or that crypto is used mainly for nefarious reasons.
If proponents of cryptocurrencies can ameliorate these concerns, opening and trading a crypto account could be just as simple as opening an E*Trade or WealthFront account.
So, when will that happen? It will occur as investments are made into companies trying to tackle these infrastructure and access problems in the current ecosystem. While we hear often about investments into new currencies, NFTs, etc., we don’t often hear about the companies that are working to ensure blockchains operate seamlessly.
For meaningful penetration of crypto to occur, it is critical that we invest to ensure consumers have faith in the functionality of the entire transaction process. This includes the security and accuracy of account balances.
Luckily, a number of really smart people are already tackling these problems. Let’s take a look at Metrika for example. Metrika works to make blockchains reliable by managing and predicting technical issues in their networks. With their technology, blockchains can foresee potential issues that may disrupt their operations.
While a blockchain works directly with Metrika, it’s the consumer who benefits most. Metrika’s technology reduces latency and improves the performance of a blockchain. It also helps to resolve issues faster with tools that enable collaboration across the blockchain ecosystem. By ensuring continuous, well-functioning operations of blockchains, consumers can build trust. Let’s be honest – no one loses trust more quickly than watching a transaction take many seconds to confirm.
Chainalysis is another interesting example. Their mission is similar to Metrika but attacks it from a different perspective. Their software is able to link entities (e.g. corporations, governments, individuals) to crypto transactions. This linking allows the transacting party to investigate who they are really transacting with and the potential source of funds. In essence, Chainalysis is helping to eliminate transactions with bad actors and help to make crypto transactions just as safe and compliant as everyday transactions with your current financial institution. While, at this time, consumers will not directly interact with companies such as Chainalysis, consumers can feel more confident transacting because these companies are working to keep bad or malicious actors from moving funds through cryptocurrencies.
Finally, let’s look at Coincover. Coincover aims to protect crypto from hackers or human error and can be used by individuals or companies.
They have three key pillars:
2) compensate, and
With their technology, holders of crypto can feel protected as Coincover aims to prevent suspicious transactions from occurring. They will actually compensate you if your account is hacked, and recover your private keys if necessary.
Essentially, this eliminates consumer fears of malicious attacks as well as the fear of losing access to your account and thus your account balances.
Until there is full confidence in blockchains and crypto accounts (which will likely never occur as we see fraudulent transactions even with bank accounts today), consumers can use offerings such as those from Coincover to ensure that their crypto balances are safe and effectively insured.
Mass adoption IS coming
As we all see day-to-day, the industry is working to increase broader adoption of crypto. In doing so, consumers have more awareness of the potential benefits of crypto, but they are also exposed to the potential risks. It is important that companies like Metrika, Chainalysis, Coincover, and many others continue to tackle the problems in the ecosystem, both real and perceived, in order to make crypto more mainstream.
About the author
Rebecca Mitchem is a Partner at Neotribe Ventures, a Silicon Valley firm investing in early to growth-stage companies developing breakthrough technologies that stretch the imagination. She co-manages Ignite, a $90M fund focused on growth-stage companies across industries including computational biology, enterprise security, blockchain technologies, cleantech, etc.