Cryptocurrencies are something that pops up in financial discussion on a regular basis but for those of us with limited ‘FinTech’ knowledge, it isn’t something that tends to crop up in everyday conversation very often. The question however is whether this could change in the future.
While cryptocurrencies have a place in online trading and financial technology, the discussion around whether they could be used in everyday life is one that consumers are much more likely to get involved in. Here, we’re exploring what cryptocurrencies are, the uses they could have in everyday life, and what’s really preventing the mass adoption of these digital coins.
What Are Cryptocurrencies?
Cryptocurrencies are, quite simply, digital currencies that operate separately of a bank or financial institution. There is no third party or central authority controlling the currency or its transactions, meaning that all activity conducted with these currencies are hosted within their own network called blockchain.
Essentially, blockchain is a series of blocks of data recording the entire history of transactions made with a certain cryptocurrency but this data is encrypted, not only providing a secure way for users to make transactions but also fast, fee-free and reliable transactions.
What Uses Do They Have?
The main use that cryptocurrencies have for consumers is, of course, for consumer purchases. While trading and investments are worthy uses of the most popular cryptocurrencies, for those of us interested in using these coins in everyday life, the growing possibility that we can use our cryptocurrency coins for real-life purchase is more than enough to catch our attention.
You might be surprised to know that, despite the ‘niche’ air about cryptocurrencies, there are plenty of industry leading brands ready and raring to accept payments with these coins and in particular, with bitcoin. Bitcoin was the first cryptocurrency to grace the market, a coin crafted by an anonymous entity known only as Satoshi Nakamoto.
Bitcoin was designed as a peer-to-peer payment system and brands and businesses have since adopted these cryptocurrencies as a method of payment. Microsoft, Expedia and plenty of retailers across Japan are accepting Bitcoin in particular as payment for their products, and Icelandic singer Bjork even accepted Bitcoins as payment for an album.
What’s Preventing Mass Adoption?
The prices of cryptocurrencies are notoriously volatile, especially with the wavering attention being paid to each one. Those that are lesser known tend to have steadier prices, but extremely low ones while those that are more popular, in particular Bitcoin, tend to fluctuate regularly due to changes in transaction volume.
Mass adoption, unfortunately, is being prevented by the uncertainty surrounding stability. The nature of cryptocurrencies can make it seem unlikely that an ideal stability will ever be reached, however with a stable ecosystem, global cooperation and a better understanding of the demand, it’s possible that this could change in the future.
While cryptocurrencies aren’t quite ready for everyday use just yet, the potential is there and it could all be a matter of stabilizing cryptocurrencies as we know them. Would you give cryptocurrency payments a try?