Crypto adoption today remains on the fringes

Crypto adoption is happening today on the fringes of the financial system, as the most commonly used payment systems are either run by old financial giants (e.g. Visa) and newer technology companies (e.g. Apple Pay, Venmo, Stripe).

There are some compelling use cases, however narrow and remote from everyday usage. Bitcoin, for example, can be useful for circumventing the financial system (getting around capital controls), in places where the financial system is failing (e.g. Venezuela), or where it isn’t allowed (e.g. Silk Road). On a day to day basis, crypto purchases are limited to novelty payments made by enthusiasts (like the infamous Bitcoin pizza).

What is the path forward?

Realistically we’re probably at least a decade away, but here’s a guess. I would think that crypto-payments first gain a foothold in countries with weak financial systems, then become increasingly mainstream as they gain a critical mass of payment volume.

The vital long-term problems to be solved: A) technology needs to be become more scalable and robust, and B) there need to be excellent mobile integrations.

While the first seems obvious, for the second, note how in China, their developing payments system largely skipped credit cards and skipped almost directly towards mobile payments. For emerging countries that must upgrade their payment systems or replace a failing existing financial system in coming years, there’s no reason that a scalable, mobile-first cryptocurrency can’t be the next step beyond mobile payments.

Following the long-term trend of the overall crypto market, greater market capitalization and further maturity of the speculative crypto ecosystem should also encourage greater price stability. Even with low levels of initial adoption, this could lead to a virtuous cycle where lower crypto volatility leads to greater payments demand leads to lower volatility, etc.