What does the 2020 hold for cryptocurrencies?
2019 was a challenging year for crypto. Here's what could change in the following year
Cryptocurrencies have had a rocky year. Despite the fact that now they’re more widely recognized and even the adoption rates have gone up they faced the biggest fraudulent activity this year and billions of dollars got stolen from the crypto owners due to inefficiency in different systems. While it seems to be on the rise in terms of exposure it faced even more challenges from authorities and banks than ever before. Even despite the fraud and hostile regulatory bodies 2019 was an important year for cryptocurrencies in terms of it finally getting a substantial level of legitimacy outside of its user base and different government bodies finally accepting the potential and the efficiency of crypto payments But there are a couple of things that we can still learn from what cryptocurrencies went though in 2019 to predict at least semi accurately what the next year holds for the biggest challenges for the banks
You might think that cryptocurrencies are more prone to fraud than cash and regular transactions but the difference is not that drastic. But still, there is so much controversy around cryptocurrencies that the general attitudes reflect these prejudices and paint crypto wallet and cryptocurrencies as unreliable. There is some truth in that in the sense that crypto payment lacks in the security aspect, at least compared to the regular banks and it has continuously come up as a main problem with cryptocurrencies. While one of its very important perks is the transparency and the technology behind cryptocurrencies, blockchains are used by companies specifically for that reason it comes with a price that its users have to pay. This year alone $4.4 billion was stolen in crypto currencies.The fraudulent activities that happened around cryptocurrency could easily happen through other mediums and platforms but since these crimes are associated with a payment method that is so controversial that it is hard to stay away from the already existing stereotypes. But by the second quarter of 2019, we saw companies like Robinhood investing more generously in insurance after the failure to secure these accounts during its previous disastrous launch that cost a fortune to a lot of its customers. More and more cryptocurrency trading apps and platforms are investing into security and trying to come up with a solution that won’t take away all the things that make cryptocurrencies so popular while gaining as much security as possible. In 2020 we will likely see more attention dedicated to security and the improvements in this direction will greatly help the industry to gain more legitimacy altogether. We’ve already seen that it is indeed possible to maintain the general infrastructure of the transactions while increasing the security and decreasing the chances of fraudulent activity. The security will likely be the primary direction in which cryptocurrencies will develop in the following year.
Various industries accepting crypto
We have already seen this trend in some industries. You can pay using crypto in some facilities, but mostly these would be entertainment venues, sports betting websites and even different casinos. The following year we will likely see the increase in amount of industries that accept crypto as a payment method which will further legitimize the currency in the eyes of those who choose to stay away from it and are against its mass adoption. This will need other factors like more lenient attitudes from the government and different regulatory bods to allow the facility to accept bitcoin or other crypto payments but since we’ve seen this work for the facilities mentioned above there’s a chance that more industries that share the demographic with crypto users will start accepting is a payment. We’ve seen a large shift in the way crypto is treated on a mass level, but the actions haven’t reflected that so far in most countries. Since the conversations about cryptocurrencies are becoming more popular we might see the proactive change in the regulations. This would probably happen at different ie in different countries but in those places were cryptocurrencies has really taken off its safe to assume that 2020 will be the year that these countries shift the regulations to allow for large adoption rates as well as more opportunities to pay with crypto at different facilities.
Regulations and taxes
It would be too easy to say that in 2020 regulations will finally reflect the reality of crypto users and the whole industry in general. But we’ve seen some trends here and there of regulators changing the exists rules for more realistic ones and a good example of that would be Australia, that took a proactive approach this year to get the crypto world under control. This particular trend is crucial for the development of the industry since it decreases the chance of people avoiding the law to do or get what they want, which is more often than not is something that is harmless and serves a personal purpose. Regulations have also held back many cryptocurrencies and different eWallets and fintechs in general from forming meaningful partnerships. Since most of the well-established companies that do want to work with fintechs dont have the framework for working with this industry and regulations don't do a good job of taking into account the nature of cryptocurrencies and are not adapted to the needs of the infrastructure. We’ve seen some fallen negotiations that ended because of the regulations. There are obviously two sides to this prediction. One would be for the regulators to change their existing regulations or at least make necessary exceptions for crypto, or cryptocurrency would have to undergo some major changes in order to fit into these regulations. But in that case, there’s a high chance that the blockchain technology will have to lose some of its key features and will probably discourage the former used to continue using the same platform or the currency. This is why it’s important to update the regulations, as well as for cryptocurrencies to strengthen their security services in order to get the best possible results out of this technology without having to compromise safety or productivity on each side.
2020 will definitely be a defining year for cryptocurrencies because they have been present enough in the financial world to be recognized and legitimized in some cases, but they have a long way to go before going mainstream and gaining worldwide acceptance. Hopefully, in the following year, we will see the willingness from both sides to collaborate and work together for the best outcome.