The world of finance professionals has fallen in love with Bitcoin, Ethereum and Ripple — but so far only due to their speculative potential. Mass adoption of cryptocurrencies is still out of the question, although BTC has been out there for not less than seven years now. Cryptocurrencies still have a long way to go to become a commonly accepted currency in day-to-day financial operations.
According to a group of analysts, blockchain-based money first has to solve four separate problems in order to reach the stage of mass adoption.
Scalability
Specialists believe: Bitcoin, the world’s first and most popular cryptocurrency, has never been designed to become this big. As a result of unprecedented growth, transactions take painfully long to complete. The confirmation can take up to several hours, which, of course, prevents BTC from becoming a widely accepted currency.
Fortunately, new technologies with a potential of solving this problem are being introduced almost daily. New cryptocurrencies, not as popular as Bitcoin in terms of speculative capabilities, can still occupy the niche of electronic money.
Protection
BTC and most of its well-known peers are praised for speculative opportunities. However, mass adoption is not only about accumulating value, it is also about being able to protect said value. And cryptocurrencies have not yet reached the required level of customer protection.
As long as PayPal offers greater degree of protection than cryptocurrencies the customers will stick to safer and more traditional means of payment. It is impossible to create a mass accepted currency without giving people a chance to protect their savings and investments in an easy and convenient manner. The market has recently witnessed the emersion of cryptocurrency mediators, that make transactions safer for both parties.
Volatility
The United States dollar has remained the world’s most used currency for several reasons, one of them being the ability to absorb shocks and sustain a relatively stable exchange rate throughout the years. In other words, to be widely accepted on a global scale, the currency has to demonstrate low degree of volatility, which is not the case of most cryptocurrencies.
Volatility can be good for traders but it is definitely bad for the currency itself. Newly introduced solutions that bring cryptocurrencies and fiat money together can be the answer.
Security
Cryptocurrencies are decentralized, yet the exchanges all traders have to use in order to buy or sell the former are not. Security of the whole network therefore comes into question, especially when BTC-e and suchlike cases are considered. Certain experts believe that decentralized exchanges (DEX) will provide the necessary solution. Delegating more power to the users can greatly enhance the security and privacy of the whole system in the long-run.
Only by solving all four problems — and probably many more — cryptocurrencies will get a chance to compete with fiat money and become a widely accepted mean of payment. Will it happen or not, depends greatly on the cryptocurrency community and the path it chooses in the coming months.
