Why Virtual Coins Have Not Gone Mainstream?May 4, 2018
In spite of years of use and a 12 figure market cap, still it is not clear whether virtual currency is here to stay or cross over into general application.
Some professionals including Robert Shiller, a renowned economist are cynical. On CNBC Trading Nation, Shiller called virtual currency a craze on par with the 17th century “tulip mania”. On the other hand, another expert Myron Scholes is helping to make a low-volatility virtual currency called SGA or SAGA.
One factor a lot of people agree can make or break a virtual coin is if it can outgrow its present appeal to the crowd and join a financial system. It depends on customers if they can adopt this virtual currency as a new payment scheme like the typical money. So far, people have proven averse to trade their traditional bills for cryptocurrencies.
Here are the reasons why cryptocurrencies have not gone mainstream.
Difficult to Spend
Perhaps the biggest hindrance to the uptake of cryptocurrencies in the financial system is the lack of chances to use it. Even if half of customers in the Amazon would utilize an Amazon coin each time they make a purchase, actually doing so stays essentially science fiction.
Liquidity in the market of cryptocurrency is shaky. Since it is difficult to make actual crypto purchases in big marketplaces, holders of virtual coin are not always capable of fulfilling their holdings.
Cryptocurrencies are too abstract
While skilled traders have no issue with the artificial scarcity and notional value which underlie several financial tools, still a lot of people choose physical objects. In spite of everything, they don’t have an issue in using gold as currency. Even if the supply of the physical currency is just a small part of the whole amount of dollars in distribution, still consumers can picture the face of the president when utilizing their digital wallets and credit cards.
Virtual currency stays exotic and badly understood. As blockchain system goes through other domains of everyone’s daily life like transport, medicine and food, the psychological barriers tend to fall.
Cryptocurrencies are too volatile
Last year, Bitcoin price rose approximately 2,000% before losing virtually 2/3 of that increase that didn’t escape the interest even of lots of casual consumers. Virtual currency has also a mixed reaction in trendy culture. Like for instance, the 2nd season of Mr. Robot shown on USA Network recently featured the story of Ecoin, an imaginary virtual coin.
Cryptocurrencies prompt lots of legal queries
For traders, due diligence and regulation are parts of the expense of carrying out business. However, consumers need and want legal tender; currency which has value which is worldwide accepted every time and anywhere they want to use it. Provided the fact that consumers are scared about whether they want a license to use their coin on groceries and gad, virtual coin will stay an investment for those with brave heart.
In general, blockchain is radical in various factors for providing latest trust models. Companies can use blockchain for the whole thing from securities, to commodities trading, from quality assurance to audits and chain management. But, it requires time to full grown for safety purpose.