Even though more and more people are taking an interest in crypto, it still has a long way to go before becoming mainstream. But what would it take? Let’s explore! Disruptive technologies such as electricity, cars, and TVs all followed a similar path to mainstream adoption: a pattern that crypto seems to be emulating. According to the Wells Fargo Investment Institute, the rate of crypto adoption around the world is uncannily similar to that of the internet.
As we observe the crypto space rapidly expanding, talks regarding its “mainstream adoption” are also becoming louder. Moreover, now that global governments are starting to regulate crypto, institutional investors who were previously against investing are joining the pool too.
Even though crypto has made massive progress and doesn’t seem to be slowing down, a lot of people are still unsure about it. From what we can tell, it seems that younger generations are more open to buying cryptocurrency while older populations take a step back.
Though it may not aid the situation, regulators and central bankers, such as Andrew Bailey, are advising potential investors to use extra caution when thinking about purchasing Bitcoin and other digital currencies. But before we go further, let’s first establish what mainstream adoption actually entails.
What is mainstream adoption?
What do we mean when we talk about the “mainstream adoption” of cryptocurrency, and how would we be able to tell when it happens? This is a difficult question. Perhaps mainstream adoption could be defined as the number of people who actually use crypto.
Would “the majority” of people around the world using crypto be enough to convince you that it is mainstream? And what qualifies as the majority? Is it 51% of all the people in the world or something else entirely?
Currently, approximately 115 million people use Bitcoin which is equal to the number of internet users in 1997 according to a study from Crypto.com. Their research suggests that nearly 300 million people globally own cryptocurrency- including Bitcoin ̶ making it one in every 25 individuals.
While one in twenty-five is closer to the average, it is still a long way from being 50% of all people. However, another recent report from crypto.com predicts that a billion people will be using cryptocurrency by the end of 2022. A billion users by the end of this year sound possible and would be an amazing feat for our community—but falls short of the goalposts set at “50% of all people.”
Honestly, though, half of the world might be too lofty a goal, especially when you remember that the internet only reached this point in 2017. Even now, daily use is limited to 65% of people. In fact, at the end of 2005 – when Web1 was coming to an end and Facebook was just getting started – only 16% had access to the internet. Despite this low number, most would say that it “was already mainstream” by then.
The Ongoing Crypto Adoption
You might be thinking that crypto adoption seems complicated, and you would be right- it is confusing. However, there are some strong arguments that we have already reached mainstream crypto adoption if we look at global trends.
Many large businesses have accepted crypto payments, including Tesla, Microsoft, and Wholefoods. In addition, fintech companies like PayPal and Square have made it possible for retail investors to get involved in cryptocurrency.
Even with all of this positive news, only 4% of people use cryptocurrency regularly. To learn more about the reasons why adoption rates are so low, let’s take a closer look at some potential obstacles standing in the way of wider adoption.
Although crypto has great potential to improve many industries and make the world a better place, it still needs to overcome some challenges before it can be widely adopted.
Challenges for mainstream adoption
Many people are familiar with the different ways that crypto can be used, and how it has the potential to make improvements on a global scale. However, before any widespread adoption can take place, there are a few issues that need to be addressed first.
Right now, very few people understand crypto. Even if they buy and sell it, they don’t really get how it works or why it might benefit them. Until people understand crypto, they won’t use it to its fullest potential. People are trying to educate everyone on the benefits of crypto, but the reality is that this could take some time.
Once people understand Bitcoin, blockchain, NFTs, and other aspects of crypto, they are still not willing to use dApps and DeFi unless the services are easy to use without too much technical lingo. Furthermore, these services must be affordable for the average person. If we want more people to start using crypto, then we need to make it as easy as possible for them.
For example, if your grandma or 6-year-old nephew can figure out how to use a dApp in just a few minutes, that’s good accessibility. We need this because the more people who are involved with and invested in crypto, the faster it will grow– which leads to even more investment from institutions, and so on. In short: making crypto accessible helps everyone involved.
Cryptocurrencies utilize blockchains, and as you may know by now, one of the primary issues with current blockchains is that they can’t communicate with each other. If we ever want the internet– or the world – to function on blockchain technology, those individual chains must be able to transfer assets and data between one another; this process is called interoperability. In the past year, interoperable blockchains, such as COSMOS and Polkadot, have leaped forward in development.
This means that soon we will see even more networks developed. Full blockchain interoperability will allow developers to create new services and apps with capabilities currently beyond our imagination. The improved efficiency of interconnectedness between various blockchains will allow for greater crypto adoption by businesses, which in turn drives it closer to being mainstream.
For cars to become the primary mode of transport, it took many years because there were no roads good enough to accommodate them. Similarly, crypto is struggling because it doesn’t have the infrastructure necessary for widespread use. If we want crypto to replace aspects of traditional finance, improvements need to be made. If you can believe it, the early internet used to be so slow that it would take ten minutes just to send a low-resolution JPEG. And if you were lucky enough not to run out of data, that is.
Can you imagine? We’ve come leaps and bounds since then–nowadays we can have Netflix, Fortnite, and fifty tabs open on Chrome all at once without any issue. But do you know what made this possible? Scalable infrastructure that people can depend on. Just as the internet developed from wooden paneled, to copper wired, and now fibre optic networks; with time, increased demand for cryptocurrency will lead investors to put more money towards building better infrastructure.
Even though everyone loves the sound of making quick and easy money, they generally don’t like losing their hard-earned cash. For a lot of individuals, putting their money into Bitcoin or Ethereum still seems like a very speculative and dangerous investment because compared to stocks, bonds, and savings accounts, cryptocurrency is much more unstable.
For example, Facebook’s stock value recently decreased by 26% in one day. Since September of last year, it has fallen by 44%. Meanwhile, Bitcoin has risen a few percentage points. However, Bitcoin’s price is based on how many coins are available and how much people are willing to pay for them. This causes its value to fluctuate more than other assets like stocks.
Mainstream media outlets, as well as crypto influences and industry moguls, have the power to send buyers rushing to buy up a new coin on an exchange. They also can cause a new coin’s price to nosedive with just a casual comment or two. For example, Elon Musk (who we all know is pretty influential) has sent Bitcoin or Shiba’s prices soaring sky-high or tumbling down with just one Tweet.
However, don’t worry; this problem most likely won’t last forever…or at least crypto probably 10 years from now because as crypto’s market cap grows. The influence any one person or media site has over crypto will reduce. We just need to be patient and have faith.
The burning of fossil fuels and emissions from factory farms and automobiles are all harming the environment. So how does crypto’s carbon footprint compare? It is tough to say precisely how damaging crypto’s energy use is to the planet, but initial evidence suggests it is not good.
Bitcoin appears to be using a large amount of energy relative to other cryptocurrencies, which could turn off younger investors who are more concerned about climate change. Plus, it doesn’t make sense to compare Bitcoin’s energy consumption with that of an entire country because…Bitcoin isn’t a country. It would be like comparing Amazon or Apple’s carbon footprint to Norway or Sweden; the numbers wouldn’t mean anything.
As of now, the only way we can compare Bitcoin’s energy usage to anything else is by comparisons with other cryptocurrencies such as Litecoin or Ether. It’s difficult to find an accurate comparison between crypto and non-crypto objects, but this will have to suffice for now. crypto e-waste is a large problem, and only about 20% of it is recyclable. This poses a dilemma for miners who want to be both energy-efficient and eco-friendly.
Avoiding responsibility for the environment is not popular at the moment, and this neglectful attitude does not reflect well on Bitcoin or cryptocurrencies in general. If crypto wants to achieve mainstream acceptance, it must become more environmentally friendly– mining included. Otherwise, future generations who are more conscious of climate change will likely write off crypto altogether.
Would you like to know where crypto is now in comparison to where it might be ten years from now? To give you some perspective, think back to the Apple App store when it was first created. All that existed were a few fun and weird apps, like one where you could blow out a candle or wave around a lightsabre. There weren’t many useful apps available.
However, fast-forwarding to the present day, it’s safe to say that the app store has come quite a long way. In 2022, for example, you will be able to run an entire business by using banking, accountancy, and logistics apps–all from your smartphone! Who could have ever predicted such technological advances?