While there are more and more people who no longer ridicule people for believing in crypto, often people turn to crypto not as a convenient way to pay for their groceries, but as a way to make money.
So what is stopping/needed for crypto to actually be mainstream?
Not thought of as an Investment.
We do not think of the cash in our wallets as a mechanism to become rich, often we do not think of it at all, except do I have enough to pay for whatever I plan to do.
This is where we need crypto to get to, when it is just part of everyday life, something that is not thought about – basically just part of it.
In some ways it needs to be invisible. I mean, the person just needs to think, do I have enough money to pay for it on my phone, not that it is even crypto.
When we use a Visa card, we are not thinking about the Visa company, just the balance we have to pay at the end of the month and whether the business accepts Visa cards.
The problem with focusing on crypto as an investment strategy, is that we are looking at how it is going to make us money, not focusing on the technology and how to streamline it to be just a normal part of our lives.
Needs to be a Stable Price.
Another problem with the adoption of crypto, is that it has a different value from the main currency used in the country you are in. For example, if you look at bitcoin, the price can fluctuate greatly.
If we look at the United States dollar as an example, often people do not think that it fluctuates because all prices in the US are in US dollars. So the cash you have to buy something with will be the exact same thing next month.
But if you are in a different country, for example Australia, then everything is in Australian dollars. If you were paid in Australian dollars, but made lots of purchases on the internet from the US then you would see that it does fluctuate, what the price is one day will be different the next day because of these fluctuations.
If we were paid in Bitcoin and all items we purchased were in bitcoin amounts, then again all the fluctuations would be gone. This is unlikely to ever happen. Though with crypto currencies the fluctuations are greater so you have even bigger swings.
Maybe the best solution is the rise of the so-called stable coins that are pegged to the national currencies.
Something like DAI that is fixed to the United States dollar, but backed by another flucting crypto currency, in this case Ethereum might be the solution here.
We can still have a fluctuating asset, but there are no price shocks and the consumer is going to feel like it is stable. Which is important for crypto to become mainstream because if we think it is going to change, this can make people hesitant to use the money they have and change their behaviour.
Easy to transfer and use the Crypto
When you look at credit cards, some people get it for the line of credit that comes with it, often though it is to have a card to make buying things easier.
The ease of paying with a card is what crypto needs here. The solution already works well. It does not have to do anything better.
But if it is a worse experience than what is happening with paying with a card, then this is going to hinder the conversion to using crypto as an everyday payment method.
For crypto to become mainstream, it has to be as easy to use and as widely accepted as a Visa credit card currently is.
Has to be fast to confirm payment.
If I use crypto to buy a coffee, I want to order it, be given a terminal or a QR code to be able to pay, pay for it and have it confirmed it is paid for within a few seconds.
Some crypto networks are very slow in processing the transaction, to deal with this, they have put layers above them to try to make it faster.
If the person can not buy something and have their purchase confirmed very quickly, crypto will never be able to become mainstream.
Deterministic low fees.
Continuing with the example of selling a coffee with crypto, then recording that transaction and managing it needs some type of fee to pay for the work being done to handle all that.
One of the problems with different cryptos at the moment is that the fee can change based on how busy the network is. As a seller of coffee I am not in control when a customer is going to turn up to purchase one.
The profit margins are likely to already be fairly thin, for crypto to work, the amount charged needs to be in proportion to what is being bought.
If the fee is going to wipe away the profit margin, then the store will not be able to accept payments using crypto. It just will not be worth it.
The fees also need to be deterministic, so that the business can work out the overhead of offering crypto as a payment option and if the value of giving the customer that option is something that they can easily absorb or would need to be added to the customer’s charge.
If the business cannot easily work this out, or is going to vary based on the network usage, most likely the business is not going to think it is worth their time to try and add it as an option and will stop crypto being available for use.
Password management
“Not your keys, not your money” is a common phrase used in the crypto space.
This is good that we can have complete control over the keys to the crypto and not let some 3rd party seize it.
Though for most users this is not something that they are thinking or caring about and only likely to think about when it is too late.
The reason why people leave it on exchanges is because of how hard it is to manage/backup/secure the keys to their crypto.
If you lose or have your physical wallet stolen, then the money is gone forever. This is similar to if you just have a crypto wallet on your phone and it is stolen or dies. If you do not have your keys backed up, the crypto is gone forever.
The advantage of crypto over a physical wallet with cash in it is if you lose the wallet (phone), and if you have a backup of your keys, then you can still have access to the money and move it to a new device by using those keys.
Key management is hard, especially being a random series of characters. Having a word-based seed recovery system is a good step forward to making it easier on people to be able to manage their keys.
There might also be an argument to get things more mainstream that we may need some type of custodial wallet that protects the consumer, that is responsible for managing the keys; similar to how banks protect their money now. Something like how exchanges function, or a bank, but if they are being a custodian of their keys, then it also has to be regulated, just like banks are presently.