According to Yoav Vilner of CNBC News, there are a few key barriers that are preventing cryptocurrency from becoming mainstream, overcome these and the world will be crypto’s oyster, in theory.
In an article last week, Vilner raises the key issues that seem to be deterring people from using cryptocurrencies, you can have a look at the article for yourself, here- https://www.cnbc.com/2018/05/03/yoav-vilner-4-reasons-cryptocurrency-still-isnt-mainstream.html
I wish to offer some further solutions to issues raised in this article, in an attempt to help cryptocurrency break into the mainstream. Before we continue, I don’t believe that my solutions will of course have any profound effect on cryptocurrency adoption any time soon, but hey, you never know…
First of all, Vilner suggests that cryptocurrency is hard to spend:
“Probably the biggest obstacle to the uptake of coins like Bitcoin and Ethereum into the real economy is the lack of opportunities to spend it. Even though more than half of Amazon customers would use an Amazon coin for their purchases, actually doing so remains basically science fiction.”
Indeed, it is, so how do we resolve this?
It’s a tricky one because really, some currencies simply aren’t made to be spent in a traditional way, in order to really make cryptocurrencies easier to spend, we first of all need to provide an education format for people so they can learn to understand which currencies have been designed for which purpose. It is only after this point, people will be able to apply cryptocurrencies to real life situations, thus, making them easier to spend.
Next, Vilner argues that cryptocurrencies are too abstract:
“People have no problem using gold — or even Tide laundry detergent — as currency. Even though the M0 (physical currency) money supply is only a small fraction of the total number of dollars in circulation, consumers can still picture the faces of presidents when using their credit cards and digital wallets. In this respect, cryptocurrency remains exotic and poorly understood.”
Cryptocurrencies are pretty exotic, but I think that’s a good thing. Again, the solution here comes back down to education, giving people the opportunity to learn how their money can turn into cryptocurrency could help reduce the stress of the unknown when it comes down to cryptocurrency value etc. Moreover, we need to establish a method for explaining how cryptography and blockchain technology works. With so many different definitions in circulation, is it any wonder people a startled and thus, hide from this technology? Once we find a way to simplify the industry and set a bunch of standards, this ‘abstractness’ will no longer be a problem.
Then, Vilner discusses the volatility of cryptocurrencies and the problems that causes, however to Vilner, as cryptocurrencies become more mainstream, this will no longer be an issue. Think about the average person. Do you think they worry about FIAT exchange values? I doubt it.
“As more people use and accept cryptocurrencies, the less sensitive any one of them will be to surges and drops. Crypto exchange rates are likely to become as irrelevant to consumers' daily habits as fiat exchange rates are now.”
Furthermore, by normalising the industry, the volatile exchange rates might actually start to calm down. Of course, the solution offered here might not sound ideal for investors but remember this is referring the how cryptocurrencies can become mainstream, store value commodities.
Finally, Vilner points out that cryptocurrencies are a legal grey area:
“Consumers want and need legal tender, money that has value that is universally accepted wherever they want to spend it. As long as consumers are worried about whether they need a broker's license to spend their coin on gas and groceries, cryptocurrency will remain an investment for the brave of heart.”
This is certainly true, until people can be left to handle cryptocurrencies in the same way they handle fiat currency, it can’t enter the mainstream. A solution to this could come from things like wage payments and crypto-bursaries, paid directly to people through a payroll system, much like a salary, in that all tax and insurance costs are deducted before the person gets the money. They simply keep the profits after all the ‘legal leg work’ has been carried out. I suppose this comes back to normalisation.
Vilner has some strong arguments here, granted none of this is ground-breaking news, realistically we all know what barriers are preventing cryptocurrency from becoming mainstream. The fixes I have suggested need to be part of a bigger universal movement which is driving for cryptocurrency adoption, backed by the big players within the industry.
People will always have a fear of the unknown, overcome this and the possibilities will be endless.