10 Problems With Cryptocurrency That Prevent Its Mainstream Use
We all love Bitcoin, but it's still a fringe thing. Here's why the problems with cryptocurrency are preventing it from widespread use.
You love Bitcoin. I love Bitcoin. We all should, in theory, love Bitcoin and blockchain technology—but we don't. Only 6 percent of the population invests in cryptocurrency at all, and even fewer are deeply active in blockchain.
In the crypto world, a lot of business owners are wondering how to bring blockchain to the masses. As a typical mainstream person, I can tell you that it's not about making a new ICO or even coming up with a better crypto wallet.
Cryto has problems. A lot of them. Sure, those nice little dapps can help, but before you can make anything go mainstream, these problems with cryptocurrency need to be fixed.
Or you know, at least addressed.
It's still extremely tech-y.
Look, I get it. Cryptocurrency started as a digital currency for Dark Web users that were either crazy hackers or criminals. That was the roots that kicked off Bitcoin’s newfound fame. Back then, it was insanely techy. People expected you to understand tech well before you could use it—or mine it.
Today, people are waiting for crypto to enter the mainstream. This remains one of the biggest problems with cryptocurrency. It’s too hard for an average Joe to use, even with a lot of the apps on the market. You need to simplify transactions more in order for folks to want to use it.
The scams are plentiful.
We have all heard of scams involving blockchain technology, ICO exit scams, or hackers stealing cryptocurrencies. It’s so commonplace, it’s basically a trope at this point. Most people who have tried to invest in cryptos found themselves on the wrong side of a hacker, a theft, or a scam.
With all the cautionary tales there are out there, is it really that shocking that many people just don’t want to deal with getting robbed? Before Bitcoin can go completely mainstream, security will need to beef up before smart contracts.
The price volatility scares away most people who aren’t interested in a get-rich-quick concept.
Remember the Bitcoin crash from 2017? It left the price of Bitcoin at around $2,000 once the plunge was done. Prior to the drop, a single full token was worth a whopping $20,000. Though the price now is somewhat steady at $6,000, people still remember the volatility.
There’s something to be said about being able to rely on a currency as far as stability goes. With crypto, there’s always that nagging chance that you might end up losing everything that you put in due to a valuation crash. That’ll drive away many advisors. There are some major differences between crypto and stocks, so many people take the safer investment options.
Of all the problems with cryptocurrency, this is actually one of the closest to being solved. Most big box retail stores don't want to accept cryptocurrency because of the volatility as well as the high price they need to pay to accept it.
Some cryptocurrency credit cards are starting to pop up, though. They instantly convert your Bitcoins into fiat money and can be used anywhere that standard debit cards can be used. The fees are still high, but it's better now than it used to be.
There's also a major threat of government regulation choking it out.
A major concern among major cryptocurrency and blockchain technology investors is the worry about government interference. Several major nations have already attempted to wipe out cryptocurrency and ban the use of cryptocurrency exchanges in their nations. With questions out there like if dogecoin is a legit cryptocurrency, you can see why some governments don't want anything to do with it.
Should this behavior become widespread, it will hinder the ability for cryptocurrency to ever get mainstream. After all, most people won't take the risk of being hit with money laundering charges just so they can mine Bitcoin.
Another concern is the scalability issue.
If you've dabbled in reading up on how Bitcoin works, you're probably already aware of one of the other major problems with cryptocurrency. Simply put, many of the most popular cryptocurrencies aren't scalable—either in transaction time, value, or the amount of power needed to process them.
Bitcoin already has a lot of difficulties when it comes to the amount of time and computing power needed to provide proof-of-work for a transaction. The more transactions happen, the worse the problem gets. If it went mainstream, we would probably see Bitcoin (and many other cryptos) fall apart.
To be fair, Bitcoin is the first of its kind and Satoshi Nakamoto knew that it'd have flaws. Even so, we have a long way to go when it comes to scaling cryptos.
Who can you even trust to hold your crypto?
A large part of the reason why people are getting dodgy about investing in cryptocurrency deals with the wallet problem. Cryptocurrency wallets can easily be broken into, hacked, or even set up as long con scams. Because of how many people trusted the wrong wallet, it's scary to just put money into certain programs.
Even when you have a really awesome wallet like Coinbase, there's another problem—hackers. No wallet is hack-proof or theft-proof in its entirety. You also don't get refunds for stolen currency. So, how can you trust it? There are unfortunately a ton of big exit scams in the history of cryptocurrency and it hasn't even been around that long.
It's not backed by government guarantees, and very few wallets are insured—if any even are anymore.
The problems with cryptocurrency safety are rife, and to make matters even worse, there is NO SAFETY NET. Fiat currency is guaranteed by government trusts. Banks are guaranteed by FDIC insurance.
Cryptocurrency isn't backed by anything aside from what other people say. Digital currency of this type just doesn't have the same protection. If you get hacked, you don't have a way to get your money back. It's gone. Poof. And there's not much to do about it because it's so difficult to trace. Insurers want nothing to do with crypto because of the risk, either.
It's also a pretty cliquey atmosphere.
Have you ever been on a cryptocurrency forum? Though there's a lot of support to be found, there's also a lot of cliquishness. A lot of forums have people who will start grilling newbies to see if they're really in the know, rather than to teach them the ropes.
It can be very hard to get into the crypto sphere if you're different from most others in the scene. I speak from experience on this one; it's a problem that can detract many.
Overall, the kinks still need to be ironed out.
Truth be told, it's kind of expected for there to be a plethora of problems with cryptocurrency, blockchain, and decentralized tech.
Even though it's been around for about 10 years, it's still a new form of technology. Because we're still poking around it, we honestly don't have a real nexus point that would make it worthwhile for most of us to commit to crypto.
Just give it time, okay?