What Prevents Crypto Payments from Going the Mainstream
Once there was a time that bitcoin was just a research paper. Only 6 to 7 years ago, people out of digital currency became a little bit familiar with the name of bitcoin, cryptocurrency, and blockchain. They don’t pay too much head in it by thinking that it is just internet money or some scheme to get-rich-quick.
Everyone is surrounded by the TV, social media, and mobile. They teach a lot about things and the whole scenario has changed now.
Nowadays, the situation is opposite to the previous condition. If you pull any finance or tech publication, it is full of the talk of blockchain and cryptocurrency. Experts are continuously talking about the future of crypto and professional investors along with the immature people who are continuously investing in crypto with great dreams of crypto-future. Recently Google has hired an executive of Paypal to dip its toe in crypto land. Google’s president of commerce announced in Bloomberg.
“Crypto is something we pay a lot of attention to […] As user demand and merchant demand evolves, we’ll evolve with it.”
There are many other well known non-tech and tech-based companies who are accepting digital currency to offer their services like Mastercard, Pavilion Hotels & Resorts, AXA Insurance, Microsoft, Starbucks, Tesla, Amazon, Visa, PayPal, airBaltic, Sotheby’s, Coca Cola, LOT Polish Airlines, Expedia, and Lush.
The only fact we know it for is that the future of crypto is uncertain. However, it has created tremendous enthusiasm in the people. Specific platforms are there that accept the crypto payment as in previous, we come to know that Google will dip the toe in the stream. But certain factors are proving as a roadblock in crypto payments going mainstream. These factors are listed in the following.
- Security concerns about the cryptocurrency
- Always uncertain condition about the worth of cryptocurrency
- Lack of education in investors
- Uncertainty in regulation
Security concerns
Blockchain is unmatched data security technology. Crypto is a blockchain-based digital currency. So, you can imagine how secure this digital currency will be. But the reality is far behind with it. The Crypto world is full of hackers, scammers, and bad actors. They risk the unmatched security provided by blockchain technology.
Crypto fraud and scams are often the main headlines of the news. These headlines keep the audiences from adopting this currency and are reserved with their traditional locations. In the last year, 2021, scams and frauds increased 79% as compared to 2020. It is reported that about $ 14 billion were lost in different scams and rug pulls in the crypto world. It is also reported that the crypto theft rate increased 516% from 2020, with $3.2 billion worth of crypto.
According to Bloomberg, business insider, TechCrunch, and CNBC that’s worth $611 Million from the poly network, $560 Million from Coincheck, $480 Million from MT.GOX, $285 Million from KUCOIN, $170 Million from BitGrill, $72 Million from Bitfinex, $64 Million from NiceHash, and $62 Million from Zaif have been stolen from 2014 to onward.
Hackers stole digital money under the noses of big companies. In such a scenario where companies are not able to secure their money, how can they manage to secure the customer’s investment?
Cyber security is one of the main top required technologies in 2022. There are new protocols, technologies, and processes coming every day. This may help to secure crypto payments from scams and hackers.
Volatility of cryptocurrency
In the traditional trade system, everyone knows money’s worth, like what will be worth $10. On the other hand, only a few know the exact worth of bitcoin, and the worth is changing every minute. From altcoins to contenders, crypto fails to offer people the stability from traditional currency.
Although this is a big name in the digital world, its volatility harmed its image in the world. In smaller coins, it may be a change of a few cents but in regards to bitcoin, there is a magnified rush and soar in the crypto market. It may have become a little bit settled but it is still very much volatile.
By looking at the following crashes within the previous 12 years, one can understand the volatility.
2011 was the year when there was a crash of -99%, April 2013 was with -83% crash in the crypto market, -83% crash in the market was seen for December 2017 to December 2018, May 2021 was a nightmare with -53% crash, and nowadays there is another crash which reduces the worth of crypto by 22%.
It is considered an asset more than a currency. Crypto payment is possible only when it acts with some stable worth.
Lack of education
There are many problems like security issues, frauds, thefts, and volatility of the crypto, proving to be a roadblock for cryptocurrency in becoming a mainstream currency. The primary issue is still the same and straightforward that many people do not properly understand crypto. They may read the potential and complexities of crypto, but not too much deep knowledge. If they want, then they have to take the initiative for it. When they have a choice between anything else and studying for hours, they take first.
In regards to education resources, there is no problem with it. Plenty of companies and enthusiasts have created simply to easy to follow guidelines on everything cryptocurrency. The average person doesn’t want to take responsibility for dealing with the problems. This lack of education creates a glitch in the security of blockchains and hackers steal the crypto from them. One day before the article’s writing, it was broadcasted and attested that hackers have hacked many accounts from crypto.com and have stolen $15M worth from those accounts.
To make it secure, companies must emphasize investors’ education to avoid any glitch in the system, which leads to loss.
Uncertainty in regulation
It is very much difficult for governing bodies to get involved due to a lack of regulatory guidelines. In case of any problem, they were left alone. This thing affected the crypto image.
Several financial institutes were going to join the crypto world, but after the 2017 crash, they backed out from the investment. In many countries, crypto is still banned due to a lack of regulation.
Even today, most crypto operators work with vague rules and best practices. Regulation will come eventually, but till that someone must clarify the direction. Most of the people are living content without crypto investment and waiting for the regulation.
Simpler onboarding for new users
Current onboarding is very complex for the new user. It requires a lot of moral sport, technical support, extensions, and third-party software. Further, it is very much difficult for new users to track and manage the crypto who don’t even know how to manage their assets. It is required that it should be very much easy, for the person who doesn’t even have a tech background and tech knowledge. To buy the crypto, store it properly in a crypto wallet, and manage his assets.
To make crypto as mainstream payment currency, sign up and KYC knows your customer process should be brief, smooth, and secure. Find ways to verify the user in a streamlined way. There should be multiple authentications required to save the system from hackers.
When will crypto become a mainstream currency?
It will become a mainstream currency when it is easy, just like using social media and the traditional banking system.
How will crypto payment become a mainstream transaction method?
In this regard, should there be a proper education system that educates the masses on how to do business with this digital currency? Before adopting crypto, digital currency companies must ensure the security of their system to avoid hackers. It will only be suitable when there is some clear worth of crypto, just like the $5 worth with less volatility.
