Decentralization, anonymity, instant transactions and no cheating. If you have heard anything about cryptocurrency, then you know that these are its main advantages. Perhaps you still have some doubts about this new monetary form. It may happen because crypto enthusiasts avoid talking about the disadvantages of virtual money. Ironically, these disadvantages explain why the cryptocurrency is still far from replacing traditional monetary forms.
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:
Thorough educational work could definitely help people to adopt the cryptocurrency, even those people who have not even heard about it.
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, BTC exchange rate was less than $1,000, but in mid-December it was already $20,000. The insane cost jump ended with a collapse, and today the Bitcoin price hovers around 9-11 thousand dollars. As for altcoins, their cost value is also volatile, although not so seriously.
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, BTC lost 70% of its value for five times.
In autumn 2017, the State Bank of Vietnam banned the payment for goods and services by virtual currencies. 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.
For now, there are not too many people, who support virtual money explicitly. However, those are going through the path of coins legalising, have to solve many legal problems. Till the cryptocurrency would not acquire a clear official status, people will use the usual monetary forms.