Buying Bitcoin on a Bitcoin ATM. Source: Shutterstock
The mainstream adoption of cryptocurrencies and their subsequent incorporation in our everyday life has become somewhat of a hot topic throughout the community. Naturally, this was further fueled following Bitcoin’s unprecedented bull run, leading to a Bitcoin price of around $20,000 in December 2017.
It goes without saying that this was the ‘aha’ moment for the average person, who only then found out about Bitcoin and its underlying technology – the blockchain.
Consequently, the parabolic price spike attracted a lot of new players in the industry. Referring to the ICO craze in 2017 and 2018, projects involved with cryptocurrencies and blockchain technology skyrocketed.
Yet, mainstream adoption seems to be lagging behind. While there’s an obvious hype in the community, it appears that it’s only there – within the community of enthusiasts, but nowhere else.
As such, it’s important to why cryptocurrencies, as well as blockchain technology fails to break out and achieve the much desired mainstream adoption. There are at least a few reasons for that.
It’s perhaps the most honest answer. Cryptocurrencies, unfortunately, are not being used with their designated function.
Let’s take Bitcoin, as the industry’s forerunner. There’s a countless number of industry proponents and influencers within the community who preach the so-called HODL mentality. It suggests that people hold on to their crypto assets, especially Bitcoin, until its price “moons” or, in other words, when it increases in value substantially.
Yet, there’s a direct contradiction in this practice, as it promotes holding onto an asset based on speculations, rather than using the asset as per its main designation. Hence, begging the question – how would adoption be achieved if no one is actually using cryptocurrencies as per their intended use cases?
Despite the benefits brought by blockchain-based technology, it’s obvious that the field is riddled by security breaches, hacks, stolen funds, and a whole lot of other insecurities.
In the last four months alone, we saw at least three exchanges being exposed to unacceptable security breaches, leaving their investors hanging dry.
For example, one of the largest bitcoin exchanges in Canada, QuadrigaCX, went through a hurdle after it turned out that its deceased owner was the only one with access to the private keys to the wallets storing its investors funds. $190 million worth of cryptocurrencies were left inaccessible.
In January, New Zealand’s Cryptopia was hacked, resulting in multi-million loss for investors, who’re currently subjected to various “haircuts” so that the exchange can function properly. Just a few days ago, a Singapore-based crypto exchange DragonEx was also hacked.
But that’s not all. Throughout the ICO bubble of 2017 and 2018, a huge percentage of the well-funded projects turned out to be underprepared with no existing products or straight off con schemes.
It’s only natural that people will be skeptical towards the industry, given how many times it has proven to be questionable, at best.
To the uneducated, Bitcoin is entirely abstract – something digital with no real value. To the semi-educated, Bitcoin and blockchain is the same thing. That’s a problem. There are fundamental differences, as well as important cornerstone principles which have to be properly explained and, more important, understood by society for the industry to begin gaining adoption.
As of yet, blockchain, as well as cryptocurrencies, in the eyes of the semi-educated person are only designated for payments and finances. In reality, however, their use cases are virtually unlimited.
Despite all of the above, it’s important to note that the future of crypto, in general, does appear to look bright.
We have major institutions such as JP Morgan and Fidelity Investments already tapping into the field. We also have marquee companies such as Starbucks, Microsoft, Facebook, Twitter, Square, and countless others, also venturing in the industry, trying to explore its benefits and potential use cases.
Yet, fundamental mentalities have to change, in order to propel the industry further.