The Top 7 Barriers to Mass Adoption of Cryptocurrency
Imagine that, Bitcoin is 10 years old. As a technology, that’s nearly enough time to achieve full development and adoption. To date, mass adoption of any technology has never been achieved in under 10 years. But for some reason, the question of why it hasn’t for crypto is continually asked. At Digitex we’ve pondered the issue of mass adoption in relation to the futures exchange and how to help the wider crypto community.
In examining several different barriers, education would help to alleviate many of the misconceptions and technically unfounded FUD that has spread through the general public over the years.
But let’s not go down that rabbit hole. For now, let’s look at the main culprits.
1. Price Fluctuation
If a car is sold for $1,000 today but then tomorrow the crypto used loses half or even 20% of its value, as a business, not only is that wreaking havoc for the company’s accountant but it’s an unsustainable business model.
And the same applies to the car buyer. If the value of the coin doubled, is the car really worth $2,000? This opens a whole new can of worms when it comes to determining the true fair value of something being bought or sold.
Now there are actually services that mitigate the issue of price fluctuation for businesses. If you google “crypto payment processing,” you’ll see there are several companies tackling the issue.
2. Criminal Association
Not having to use real personal identifiable information is the 300-pound gorilla in the room. This issue of engaging in financial transactions with questionable characters has been effectively used to scare people away. Proponents of cryptocurrency use the Silk Road as an example. Showcasing what happens when you allow people to use a free market without identifying themselves.
Since many illicit items on the Silk Road were paid for in Bitcoin, crypto’s name became tarnished. Add to that high-profile hacks and scams and it’s no wonder people put 2 and 2 together to make 5.
Earlier this year Coincheck was taken for nearly 530 million USD. That’s nearly one-fourth of all that was taken between 2011 and 2018!
This is one of the reasons that Digitex is working to produce the most secure exchange possible that will ultimately not hold onto users’ funds and not be a target for hackers.
There’s no question, 2018 has been the year of regulators. Some nations have made friendly regulatory environments while others have been very restrictive like China banning ICOs this year.
The US has taken nearly 10 years to say something by way of the IRS and SEC. But the official stance is much too little in clearing the murky water in their jurisdiction.
The Blockchain Island known as Malta has been leading the way in creating and implementing regulation that will foster the crypto industry. And as strong supporters of progressive regulation and innovation, Digitex is in favor of regulation that fosters growth and helps develop basic standards in the industry.
Granted, we aren’t back in 2012, when you had to mind your own BTC on a CPU. That level of technical understanding isn’t needed today. Still, most people think you have to be technically inclined to use cryptocurrencies.
One of the easiest ways to get into cryptos is buying it on Coinbase. They're like the Apple of crypto exchanges. Their user-interface is clean and simple. But they only allow for spot trading.
Digitex has designed its enhanced UX and will use a one-click ladder trading scale and see the price discovery in real time. This means that you don’t have to be a seasoned trader to use the Digitex Futures exchange.
5. Too Many Options
Generally speaking, people like to have options. But they don’t work well with having too many options. They get overwhelmed. This is the case of cryptos in part because of the ability to fork (make a different version) of the technology.
Looking at CoinCheckUp there are over 2,000 coins. All claiming to do something better than the other. Interestingly enough, there are signs of a culling on the horizon.
In 2018 we’ve seen many coins fade away because they have no real utility to their platform. Digitex is different because the DGTX token is used to pay out profits, as well as denote profits and losses. It will also help to give traders some insulation from drastic price swings in the underlying cryptos. The recent price rise is a good indicator that token holders understand the purpose of the token.
The ability to process more transactions at Visa and Mastercard levels has been the dream of the crypto community from day one. After all these years, there’s been no solid solution developed. Some progress has been made in side-chain technology, but, most are still in the beta test phase.
The Lightning Network does look promising. But there needs to be more infrastructure to meet the real demand. Digitex has created a hybrid model exchange that combines centralized data storage and decentralized blockchain technology. This will meet current scaling needs.
Once the Plasma protocol is finalized, the technology with be integrated into the platform. The benefit of this technology is that transaction processing will be scalable to traditional credit card levels and for a fraction of the cost.
7. Environmental Impact
Most users and non-users of cryptos when asked are in favor of green technology. For the environmentally conscious using Proof of Work to mine cryptos is a grave issue. The hash computations for blockchains require a large consumption of energy.
Digitex is using doing its part to reduce its environmental footprint by using smart contracts based on the Ethereum blockchain. Smart contracts will be used to carry out future contracts off-chain, instead of having every transaction take place on-chain. Only the final balance will be processed on-chain. Also, tokens will only be minted based on community need.
Most people involved in cryptocurrency today have never even read the Bitcoin white paper. And most newcomers probably never will, but that doesn’t matter. Mass adoption of cryptocurrencies isn’t reliant on people knowing that. Just like people using Fitbits isn’t dependent on them understanding how Bluetooth works.
A major key to mass adoption is simply education. Getting people to see past PR gimmicks and the FUD is easily countered by understanding the basics. Providing simple how-to articles, videos, and zero-fee trading is Digitex’s approach to lowering the barrier to entry and aiding in the mass adoption of cryptocurrency.