3 Reasons Why Most People Do Not Use Cryptocurrency

Decentralization, anonymity, instant transactions, and no fraud. If you have heard anything about cryptocurrency, then you know that these are its main advantages. Perhaps you still don’t trust the new digital money and the reason for that could be that crypto enthusiasts usually avoid talking about its disadvantages. Ironically, it is these disadvantages that explain why cryptocurrency is still far from replacing traditional money.

Poor awareness

The main reason why cryptocurrency is not used everywhere is the lack of awareness. The 2015 PwC survey gave us information that 83% of people do not know anything about cryptocurrency, or know extremely little. If this survey was conducted today, the results would be almost the same. Many people do not know that besides Bitcoin there exist other cryptocurrencies — altcoins. Those who know about altcoins still do not use them, because they do not trust them enough. This closes the cycle of cryptocurrency ignorance.

To encourage people to use cryptocurrency massively, firstly we must explain to them:

• What cryptocurrency is
• What types of coins and tokens exist
• How they can be used
• What their advantages and disadvantages are.

Thorough educational work could definitely help people to adopt the cryptocurrency, even those people who have not even heard about it.

Volatility

In 2010, Laszlo Hanyecz, a US resident, bought two pizzas for 10 thousand bitcoins. If he had kept these coins, today he would be an owner of $115 million. At the beginning of 2017, the price of BTC was less than $1000, but in mid-December it was already $20,000. Although then the insane jump ended with a collapse. As for altcoins, their prices are also volatile, albeit not so serious.

Rate fluctuations are another reason why financially literate people don’t use bitcoins for everyday transactions. Some of them are afraid of repeating the fate of Hanyecz and store coins in the hope for price rising. Nevertheless, we can say without doubts: to gain people’s trust, the currency must be stable. When we talk about Bitcoin, the word ‘stable’ is not applicable at all: in 2017, it lost 70% of its price five times.

Global events

In autumn 2017, the State Bank of Vietnam banned the use of cryptocurrencies to pay for goods and services. Approximately at the same time, the Chinese government announced its intention to close the crypto exchanges operating in the country.

In contrast, some countries are taking steps to legitimise cryptocurrency. The last country that accepted Bitcoins as a payment method was Germany. A bit earlier, the Japanese government passed a new payment system law that gave Bitcoin currency the right to be considered as the legal money. Belarus also legalises cryptocurrency and all related operations.

There are still few clear supporters of digital money. However, those who are on the way to legalising cryptocurrencies have to solve many legal problems. And until cryptocurrency has gained official status, people will use traditional money.