Why cryptocurrencies struggles to be mainstream?

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When bitcoin was released 10 years ago, many looked forward for it to be the future of online payments and the money itself. To date, bitcoin evolve into a landscape of cryptocurrencies and a twelve billion market cap but still far from becoming a mainstream mode of payment and a major currency. With cryptocurrencies surged to popularity, adapting it to be a mainstream currency pose a lot of technical and legal challenges and issues. Bitcoin will never become mainstream unless the issues are sort out.

Crypto is Volatile

Everyone knew what a 10 dollar or euro is worth but for bitcoin and other cryptocurrencies, there is a quite few people. The values of bitcoin or an altcoin changes every minute and it offers no stability. This turns off majority of people which expect a stable transactional currency. The volatility of bitcoin has stained the image of cryptocurrencies even with altcoins does not changes above a fraction of a cent.

In 2017, bitcoin popularity soared high wherein its value jumps from 1000 to 12000 dollars at some point. Unfortunately, the volatility of bitcoin is a high risk for most people as it can rise or crash at any moment. In 2020, bitcoin may have settled a little but most people still remembers the crash in early 2018. Around late 2017 and early 2018, the Bitcoin value peg to U.S. dollar rose around 2,000 percent before losing almost two-thirds of that gain. This does not escape peoples attention especially the many casual consumers.

Most investors are well aware on how crypto works including the rumors on regulatory uncertainties and speculations. However, the masses is less familiar to no knowledge about cryptocurrencies. For cryptocurrencies to be mainstream, mass consumers must know the worth of their digital money.

Crypto is hard to spend

Bitcoin and Ethereum has a high value relative to cryptocurrency relative to US dollar but lacks opportunity to be spend in real economy. The cryptocurrencies has poor liquidity that big marketplaces are hesitant to adapt.

Aside from it liquidity concerns, Bitcoin transaction has too expensive transaction fees. This is due to limited transaction per seconds. Currently, it has about 7 transactions per seconds. This limitation is intentional to prevent attacks to the network. Also, there is a limit on the number of transactions the network can process at any given time. The transaction capacity of bitcoin or any altcoins is a thousand lower as to real economy payment networks such as VISA.

With the rising popularity of cryptocurrencies, the transaction load becomes increasingly difficult to keep up with the demand which may become overloaded with unprocessed transactions. This becomes true as crypto market is break a new record high price. Users need to wait for hours or sometimes days for the transaction an payment to be processed.

As Bitcoin has grown in popularity and payment load, it's increasingly difficult for its network to keep up with the demand, and sometimes it becomes overloaded with unhandled transactions. This was especially true at the turn of the year, when cryptocurrency prices were at a record high. Users had to wait hours and sometimes days before their payments were processed. Consequently, Bitcoin transaction fees have sometimes climbed higher than $50.

Legal hurdles in crypto

The government are reluctant to endorsing cryptocurrencies due to crypto wallets can be used without any form of identification or going through government institutions. Investors accept any form of regulation and due diligence as part of doing business but For investors, regulation and due diligence are just part of the cost of doing business but mass consumers want and need legal tender, so that their digital money has a value and can be spend any way they want it. For consumers, they tend to need brokers to assure the values for their digital money. In this case, cryptocurrency remains an investment for the brave.

Cryptocurrencies dream is to put a decentralized payment and transaction system. However, mass consumer adaptation needs some form of assurance or regulation. TO date, there is less to no regulatory guidelines that governs crypto market. This somehow discourages some to onboard on it. There are a lot of consumers who want to join but no one wants to sit back and let fraudulent initial coin offerings (ICOs) run the money of an honest consumers.

Final Thoughts

All these constraints in adapting cryptocurrencies are not to doomed the crypto market. The adaptation may not come fast as we want it to be. Cryptocurrency is not trying to be a addition to the old economy but trying to disrupt a long standing market and institutions that existed for millennia. After a decade of ups and downs, Bitcoin and altcoins showed resilience over the years, regardless of political and economic issues. More companies are interested in Bitcoin that may give the cryptocurrency market a boost and opportunity to grow.