A myriad of reasons have been associated with the existing issues surrounding mainstream crypto adoption. Experts observe that a number of complications have continued to hamper the virtual money industry from experiencing a full currency evolution.
Arguably, the current state of 21st century technology has changed the manner in which business is transacted. A large number of digital innovations have been gears towards digitizing the payment process.
The advent of blockchain technology was meant to fill the gaps existing in across traditional financial sectors. As a decentralized method of exchange, the innovation negated the need for third parties and central banks that have been notorious for creating stringent monetary policies that affect daily business.
Otherwise, cryptocurrencies have been regulated through the mining process involving the blockchain public ledger – mining ensures accountability and transparency as far as the circulation is concerned.
Cryptocurrencies happen to outcompete their fiat counterparts in the efficiency department. Virtual coins offer a relevant currency alternative in a rapidly digitized world – this premise has been reported widely.
However, while the above advantages were expected to influence radical steps towards the advancement of crypto popularity, a number reasons seem to complicate the mainstream adoption of virtual currencies across the globe:
Media reports of crypto crime have led to the general public perception that virtual currencies are the primary enablers of global-scale cybercrime.
Just recently, Twitter suffered an online attack that went down as its worst breach since its establishment. Threat actors hacked the social media giant’s internal systems and gained access to the platform’s VIP accounts – including the profiles of world-famous philanthropists, entertainment moguls and political figures.
The brazen attack took the form of a Bitcoin scam where hackers used the compromised accounts to solicit for Bitcoin from unsuspecting users. A reported $120,000 worth of crypto was lost to the scam.
Considering that the above example joins the list of other crypto-related criminal events, blockchain’s popularity continues to be affected negatively.
Government policies and financial institutional regulations join the league of notable barriers that have prevented the crypto industry from blooming to full effect – unfavorable regulations hamper virtual currencies from becoming globally accepted.
In a nutshell, a host of taxation laws across international locations have proven to be way too complicated to enable a healthy crypto revolution. Expectedly, most of crypto’s woes are attributed to the fact that virtual money exists independent of government actors and central banks.
Importantly, governments exert their power because of their ability to control the circulation of funds within a given economy – supporting cryptocurrencies would fully contradict their functions.
Thus, governments and banking institutions have consistently churned out anti-crypto policies to discourage the use of digital money as a means of exchange.
Disadvantages of the Mining Process
As mentioned before, cryptocurrency transactions are accounted and verified through the mining process. Crypto transactions on the blockchain are usually confirmed and kept as “blocks of information by crypto miners.
Unfortunately, the mining process fails in the energy sustainability department as it consumes vast amounts of energy – the entire process generates a lot of heat. In fact the, a study by the University of Cambridge estimated that the Bitcoin network accounts for 0.21 percent of the global energy productions – a figure that matches up to the total energy consumption estimates of some countries.
The Scalability Problem
Blockchain technology was designed to process seven transactions per second, as cryptocurrency developers sought to prevent hacking attacks that target the technology. However, considering the current widespread use of crypto, a massive problem exists – scalability.
The fact that experts have failed to provide a lasting solution to the scalability problem has made the crypto space to lag behind significantly.