Question:

What is holding cryptocurrency back from mainstream adoption?

As discussed in Part I, there are eight major barriers impeding cryptocurrencies from mainstream adoption. In Part II, we will discuss the four other barriers to mainstream adoption.

We deem these four barriers as major, but when compared to the top four, these are the concerns that are rarely raised when discussing cryptocurrencies with prospective cryptocurrency users (PCUs).

However, these are still major barriers because PCUs will invariably hear about one of these four, and then have another reason to not use cryptocurrencies (T_T).

Even the dogs are crying!

Quick recap of the other four major barriers to mainstream adoption.

5. Misinformation 6. Network Congestion 7. Environmental Concerns 8. Why "Cryptocurrency?"

We will address each in turn, once we stop crying.

Misinformation

Misinformation is rampant in cryptocurrencies. Misinformation is so rampant that we even have a term for it … FUD. FUD is an acronym for Fear Uncertainty and Doubt, which is defined by Decryptionary as “ any information that is supposed to create feelings of fear, uncertainty, doubt and other negative emotions” [1]. For example, when allegations arose that Binance, the world’s largest exchange, was hacked in early 2018, John McAffee, a prominent public figure in cryptocurrency circles, latched onto the misinformation and tweeted a scathing statement at the Binance CEO [2]. This all happened with no confirming information — and in cryptocurrency markets and communities, it really only takes a tweet to cause such a shakeup [2].

Other than FUD, PCUs also need to be wary of shills, people who use propaganda to promote certain cryptocurrencies (often shitcoins) or ICOs (often terrible projects themselves) to increase market demand for their own financial gain [3]. Now, we are not saying that every perosn who promotes a cryptocurrency or ICO is a shill, rather, that PCUs should be on the lookout.

For a newcomer, this requires some serious due diligence(aka do-your-own-research (DYOR)) on every cryptocurrency and online person they meet, which can be extremely tiring and takeaway from the fun parts of cryptocurrencies.

Network Congestion

Network congestion is also a potentialturn off for PCUs, especially those who were around for Bitcoin’s big boom in late 2017 [4]. During that time, the average transaction fee on the Bitcoin network reached above $40 dollars, which was levels higher than ever seen before and a big slap to the face for those who espoused Bitcoin’s low-fee nature [5].

The same happened to the Ethereum network as well, but not to the same level as Bitcoin [6]. The increase in transaction fees, as a simplified explanation, came from a rise in network utilization, i.e., more people are trying to make transactions on the network and the miners are trying to keep up with the demand (for Bitcoin, unaware users sending more inputs for an output; for Ethereum, users doing more operations on the network than intended)[7]. To get the miner’s attention, users started increasing their fee amount so miners would process their transactions faster [7].

This unfortunately had the aforementioned effect of increasing the transaction fee [7]. Then this made people question the utility of cryptocurrencies when network congestion can raise the fees so high, especially in comparison to Visa’s and Mastercard’s payment network which can process more transactions per second (TPS) [8]. This has [un]fortunately led to a big drive for increasing TPS in blockchain projects, with Plasma for Ethereum being of the most notable [9].

Thankfully, the community has realized this issue and is working on it as we speak, but until then, this will remain a barrier to entry for PCUS simply because they do not want to deal with or the possibility of higher than usual fees [5].

Environmental Concerns

The environmental concerns surrounding cryptocurrencies is also a barrier to adoption. For many, the enormous amount of energy consumption required to do Proof-of-Work (PoW) to mine just 1 Bitcoin is bad for the environment [10].

Though, it is tough to argue that the amount of energy consumption for Bitcoin mining does not appear egregious when it is almost as much as the energy consumption for Denmark [11].

Also, that’s not even taking into account the environmental impact from making, using, and disposing of GPUs [12].

However, the environmental concerns are overblown to the extent they do not take into account mining’s energy consumption in relation to the production of other valuable goods, such as gold, which has a much worse environmental impact and social impact on the country’s where it is mined [13].

Furthermore, unfortunately Bitcoin does get the majority of attention regarding cryptocurrencies, but there are many cryptocurrency communities that have realized that Bitcoin’s PoW mining may be unsustainable, and have made alternatives to avoid the environmental concerns such as Peercoin creating Proof-of-Stake (PoS) mining algorithm [10][14].

Why “Cryptocurrency?”

This is one that often comes up in conversations with PCUs. PCUs simply don’t get the name, and we completely understand why (How often does anyone here the word “crypto?”). Many times, we are told that the name sounds suspect, fishy, or criminal, and questions regarding its status as a currency

We often have to explain that the name is simply a combination of the words “cryptography” and “currency.”

This usually leads to more confusion (sigh).

Then we take it a step further and explain the origins. The term cryptography, as used here, refers to the encoding and decoding of data (not the practice or study of cryptography, sorry for all the cryptographers who have to deal with this issue) [15]. The term currency (though you could say its usage here is more akin to money), as used here, best refers to something in circulation that is used as a medium of exchange [16].

Further, the term arises out of the cypherpunk communities that arose in the 1980-90s who wanted to secure their communications over the internet [17]. The cyherpunk communities were adamant about securing their privacy over the internet, in light of fears of government oppression and mass surveillance [4]. Cypherpunk’s knew they needed a secure means of communication so they turned to cryptography for encoding and decoding information [17].

The need for more and more secure means of sharing information eventually led to the rise of public-key infrastructure and the one and only, Bitcoin, the first cryptocurrency [17]. Although no one knows the true identity of Satoshi Nakamoto, the creator of Bitcoin, it is all but assured that Satoshi was a fellow cypherpunk and in continuing the tradition, went on to create the most secure means of transferring “anything” from one person to another [17].

So if your PCUs start asking where the name comes from, either give them the simple dictionary definition or the more complicated history of the cypherpunk movement [17].