Researchers from Imperial College London measured how close cryptocurrency is to become mainstream money.
Specialists listed the three main criteria as being able to act as a store of value, a medium of exchange and a unit of account. Bitcoin and other major digital currencies are already serving one of those roles, as millions of people are using them as a store of value.
In order to fulfill the final two criteria, the researchers said bitcoin and company will need to overcome challenges like scalability and regulation: “The world of cryptocurrency is evolving as rapidly as the considerable collection of confusing terminology that accompanies it. These decentralized technologies have the potential to upend everything we thought we knew about the nature of financial systems and financial assets,” said Professor William Knottenbelt from Imperial.
“There’s a lot of skepticism over cryptocurrencies and how they could ever become a day-to-day payment system used by the man on the street. In this research we show that cryptocurrencies have already made significant headway towards fulfilling the criteria for becoming a widely accepted method of payment.”
Dr. Zeynep Gurguc from Imperial added: “New payment systems – or asset classes – do not emerge overnight but it is worth noting that the concept of money has evolved – even in our lifetime – from cash to digital or contactless payments. The wider use of cryptocurrencies and crypto-assets is the next natural step if they successfully overcome the six challenges [scalability, usability, regulation, volatility, incentives and privacy] we set out in our report.”
“The history of money is a history of evolution, of new technology replacing old to improve the transfer of value from one person to another. Cryptocurrencies represent a next step on this journey,” said Iqbal Gandham, the UK managing director of eToro.
