As Blockchain-based cryptocurrencies like Bitcoin and Ether continue to progress in terms of development and popularity, the mass adoption dream begins to look more achievable.
However, there is still much to do and even Bitcoin, the most popular, valuable and secure cryptocurrency is far from being consumer-ready.
Even though Bitcoin couldn’t handle mainstream adoption if it happened today, there are other key factors that must first be dealt with if we are to ever break out of the “Blockchain sandbox”.
While Blockchain technology has come a long way, there is still a lot to be done. The four problems analyzed are still major impediments and some continue to be problems in the traditional economy itself.
The Blockchain development sector is one where creativity and commitment never cease to amaze, and as so we think the future will continue to shine bright for cryptos.
Scalability
This is the first thing that comes to mind and the most incapacitating roadblock. Bitcoin’s transactions throughput capacity were put to the test these recent months, and the results are well-known: delayed transactions, high fees, and a lot of name calling on Twitter.
Yes, scalability is a problem in and of itself, but the tension created by the discussions surrounding it can be just as bad, leading to panic sales in the market, competing protocol changes, and overall confusion for entrant users.
Luckily, this has been a main focus in the developer community with no shortage of ideas and BIP (Bitcoin Improvement Proposals) being submitted to that effect.
Many developers have also turned their sights to alternative Blockchains that are designed with the latest technology and mass adoption in mind.
Customer protection
Earlier this month, the crypto community rejoiced as Bitcoin’s market cap overtook PayPal’s. This, however, can also be viewed as a problem.
Although Bitcoin has overshadowed the PayPal stock, its user base is nowhere near the 210 mln users that own a PayPal account.
With this in mind, it’s simple to conclude that crypto is still a highly speculative market.
So, what's stopping people from using Bitcoin and other cryptocurrencies that offer far more advanced technology than that employed by PayPal?
Two words: consumer protection. There is simply no such thing in crypto.
If you want to buy something with Bitcoin, you either have to trust the merchant completely or you have to get an additional escrow agent that can mediate the transaction, making the whole process complicated and expensive.
Nuno Correia, CEO of Utrust says his team is building a simple, yet effective solution on a platform that will feature its own consumer protection system, allowing users to shop online with the same ease they do when using eBay or PayPal.
Cointelegraph asks Correia how the platform can help cryptocurrencies achieve mass adoption.
He states:
“UTRUST will bring confidence to crypto adopters. They will no longer feel that they are taking a risk when purchasing online!”
Volatility
Bitcoin is no stranger to volatility, the bipolar cousin of inflation. Although volatility is where traders make a living, it’s not a desired property in any currency.
This problem ties in nicely with the consumer protection issue we just reviewed.
Merchants and customers are the two basic components of any transaction and although there are many Bitcoiners out there ready to spend their BTC wherever they can, merchants may be reluctant to deal with the added risk.
While the system employed in the Utrust platform allows merchants to deal with fiat only, this is not a complete solution to the volatility problem.
However, projects like Bitshares, Waves and Tether are leveraging Blockchain technology to provide us with Blockchain-based fiat tokens like BitUSD, wUSD, and USDT, respectively.
Security
This isn’t a cryptocurrency-specific problem per se, but it’s still something that must be addressed urgently if cryptocurrencies are to continue on their ascent towards the mainstream stage.
We’re not even talking about the ridiculous numbers of scams, schemes and tricks designed to take your coins online. We’re talking about exchanges.
Exchanges have become a gateway into the cryptocurrency world, providing a convenient and affordable service.
However, these same exchanges have become centralized fail points to an otherwise decentralized economy.
From the infamous Mt. Gox hack, to the latest problems found in Bitfinex and BTC-e, this problem doesn’t seem to have got better with time.
The solution lies with decentralized exchanges (DEX). Open-source projects like Bitsquare, Waves DEX and the upcoming BarterDEX by SuperNet all put control back in the user’s hand, allowing them to buy and sell cryptocurrencies without the need to trust a third-party entity, promoting security, privacy and efficiency.
Audo, Community Leader of SuperNet, tells Cointelegraph:
“With a decentralized exchange like BarterDEX, trading can be done through a wallet in a decentralized environment. So, a user would just have to download one app that functions both as a multi-coin wallet and coin exchange. That is all he needs, and at the end will make it very easy to store, buy and sell multiple cryptocurrencies, while allowing for further functionalities to be built into the app.”