In a recent survey of 154 nations, it was discovered that an increase of 881% was witnessed in the adoption of crypto, last year and around 2,300% since the third quarter of 2019. This increase in the adoption of cryptocurrency is indicating the start of a new era in which the economy is going digital.
In the modern-day economy, cryptocurrencies and their blockchain technology have emerged as the next big invention. Even though it has faced a huge backlash from various governments all over the world, it still has continued to grow and has started to change the perspective of many financial institutions. Even many governments around the world have started to realize the benefits that cryptocurrency will offer to their economy.
During the global pandemic, the trend of online payments has increased significantly and more and more people have started to realize the importance of the token-based economy.
Some Hindrances and Their Possible Solutions
Though there has been a significant increase in the adoption rate of cryptocurrency, there still is a huge population that is completely unaware of the ecosystem of the digital market.
Difficulty in Understanding the Concept of Cryptocurrency for Beginners
For beginners entering the cryptocurrency market can be a daunting task with all the complexities in the concepts associated with it. It would be highly beneficial if these complex ideas and topics were more accessible to the people so that they could understand them. Not having any knowledge of complex technical topics and ideas only discourages the newcomers.
Even though a lot of material in digital and physical form is available, efforts must be made to educate general people, which at present are not sufficient. It is also important that the process of sending Bitcoins from one individual to another should be kept as simple as possible.
Huge price swings in cryptocurrency in a matter of a few hours are another reason that scares new small investors from entering the crypto market. For professional traders, volatility is a good thing as it provides an opportunity to generate a significant gain.
When talking about cryptocurrency all the talk is about its prices and not much emphasis is given on technologies like blockchain and the innovations associated with it, especially by media houses. This only scares the general population, who are completely unfamiliar with the real truth.
Volatility also creates a monetary risk, which influences the adoption of Bitcoin as a medium of exchange. This volatility, where on one hand could boost the purchasing power of consumers, on the other hand, could also diminish it significantly, an unacceptable risk. Due to this, cryptocurrency is viewed as a digital speculative asset rather than a regular means of exchange.
Scalability is another issue that could act as an obstacle to the adoption of cryptocurrency. There have been instances where infrastructures were unable to scale up when there was a huge surge of consumers.
It is likely that with an increase in the number of transactions, there would be delays on the network. Efforts have been put into finding solutions to the problem, and the answer may be in the lightning network, which is believed to take the speed of transaction validation to the next level.
In many developing nations, investments in cryptocurrency are done just like a store for wealth and people are not interested in any of its technological aspects. Many even started investing in Bitcoin after seeing the current Bull Run, hoping to gain from it.
This situation must be improved. More and more businesses must start to accept Bitcoin as a medium to exchange.
Disclaimer: The article is just to provide information and shouldn’t be considered as any financial advice. It is advisable to conduct thorough research before investing in any cryptocurrency.
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