Why do some people still fear/doubt cryptocurrencies? How long shall it take cryptocurrencies to knock out fiat money in the game? Or shall it even happen? Well, in this article, we'll look at some of the obstacles that the crypto-industry faces so we can have realistic expectations with regards to global acceptance.
While cryptocurrencies are and will continue to be a threat to banks, as it stands, banks cannot just be eliminated abruptly in the game. It will hurt both parties (banks and cryptocurrencies alike). We shouldn't forget that most if not all the money that goes into cryptocurrencies is coming from the very banks that stand to lose when cryptocurrencies will become widely used in all jurisdictions across the world.
This means most financial institutions will only get to the brink of collapsing when some of the top performing cryptocurrencies in the market like bitcoin, ethereum, litecoin, bitcoincash etc have become an everyday thing: people can easily buy foodstuff, pay for lodging/rents, commuting etc. using these cryptocurrencies.
Current limitations.
Having a great idea is one thing. Getting the world to embrace such an idea is a completely different story. So we’ll look at the ongoing hurdles facing cryptocurrencies from the following angles.
-Technical.
-Media coverage.
-Cryptocurrencies vs fiat money
-Volatility.
Technical challenges.
If we consider bitcoin for example which is the most renowned and trusted cryptocurrency ( doesn’t matter if you hate it) in the world. Upon creation, it wasn’t possible to visualize every single challenge that’ll lie in the way. That is, it was impossible to tell all the issues that’ll arise when say 2 million, 3 million etc users start accepting bitcoin. The only solution is to test... test and keep testing until the vision is realized (worldwide adoption).
Let’s take a step back and see what happened when bitcoin transaction fees started increasing. A couple of short-term solutions like transaction batching and segwit were proposed and implemented. They helped quite alright but certainly weren’t going to be the final solution for mass adoption.
Another proposed solution quickly came up: bitcoin lightning network. But this too has to undergo a couple of tests (what is currently going on.) until the technology is ripe for implementation. And whether or not the lightning network becomes the final solution will depend on community feedback. Because anything blockchain/cryptocurrency related is supposed to people-based. Any solution that threatens to take us back to the excessive centralization that has brought untold suffering to the world is not welcomed.
Media coverage.
Social media and other news outlets around the web have often tagged cryptocurrencies especially bitcoin with loads of negativity. If you’ve been in the space for a while, you can definitely relate. Even if you learned about bitcoin just yesterday, chances are you’ve already had your own share of “bitcoin is a scam, bitcoin is a bubble, cryptocurrency is a pipe dream, it’s a fantasy”. All these negative remarks only help people to distance themselves from cryptocurrencies. A bad move for worldwide adoption.
Cryptocurrencies vs fiat money.
If you have a basic understanding of blockchain and cryptocurrencies, you already know that cryptocurrencies are the future of money. Which means today's banks and other financial institutions are already existing as “endangered species” Instead of simply embracing this innovation, some of these financial institutions would do everything they can to misinform the population about cryptocurrencies.
I believe any learned person who’s read a thing or two about blockchain/cryptocurrencies, understands how they work and yet spreads negativity about the subject is a self-centered individual. These are the same people who don’t want to bring positive change to society. I’m sure if we do a thorough investigation into some of the ills ( fraud, corruption bureaucracy, money laundry etc) that plague our society, most officials who detest cryptocurrencies will likely be involved in one way or the other.
Volatility.
If you’re neither a cryptocurrency hodler nor trader, you probably would have no interest to be a regular crypto user because of market volatility. There’s no guarantee that the price of a given digital asset will be the same in the next minute, not to mention over a period of 24 hrs.
Sure, a few rich people may not care about the impact of volatility on their cryptocurrency holdings, after all, they have the money. But if you’re living on a budget, can you dare? Because you risk going without food in the days ahead if you do.
The above phenomenon literally means only a limited segment of the population would be actively involved in most commercial aspects of cryptocurrencies. Anyone living on a minimum wage would want at least some reasonable level of stability before becoming a regular crypto user.