I've been in banking for over 15 years, most of which has been dedicated to managing payment products like Debit Card, Prepaid Cards, Credit Cards, etc. Cryptocurrencies provide a lot of potential because they will allow anyone to create his/her own currency (with a little effort and basic knowledge). The fact that they are decentralized also is very interesting because now most of the currency infrastructure is owned by very few players who make all the rules.
However, the idea that Bitcoin, Ether, Tokens, etc will be then end of banking and the payment networks is a bit naive. As an example, 20 years ago, everyone was convinced that check were dead because people were moving to ACH, debit and credit cards. Today, checks are still the primary method of making large dollar payments. Check usage is declining year over year very quickly, they are still alive and kicking even though they were projected to be replaced by now.
Below is my list of some major hurdles I see for Cryptocurrencies:
- Conversion: It is still too difficult for the average person to find the "right" wallet and purchase currency. There are still many hurdles to convert money (dollars, euro's, etc) into Bitcoin. It's definitely more difficult than opening a bank account online.
- Security: The average user is scared that their their private keys will be stolen or lost. As it relates to passwords, the average user does not want to create a very complicated password to access a wallet, and they certainly are not interested in storing a cold wallet somewhere.
- Liabiliy: Visa and Mastercard issuers fund "Zero Liability" protection to protect cardholders against loss if their account information is lost or stolen. In the cryptocurrency world, each (average) user is on their own and if they lose their funds, the money is basically gone. There's no dispute or chargeback system if a user's account is hacked.
- Ease of Use: Apple Pay was so exciting, but it can't be used everywhere so people forget they have it and just go back to using thier cards for payments. Finding a store that takes Ethereum or Waves or Steem is almost impossible. Bitcoin probably has the greatest accessibility, but it's still very low compared to cards.
Feel free to disagree with me and/or add your own! This is not a comprehensive list, but I think it is a useful topic for those of us interested in the success of Cryptocurrencies to consider.
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STOPAll valid and relevant points indeed. Plus there's still a lot of people of the older generation who, believe it or not, still do not even have mobile phones let alone internet access, and nor do they want it. Granted that is a dwindling but still a substantial pool of people. Without modern tech, it's pretty hard to use cryptos :-)
Some people just prefer to have cold hard cash... and no a paper wallet is not the same thing. That brings us nicely to the next topic... the war on cash!
Yes, cash will also be difficult to replace
Thanks, an interesting read.
To me FIAT currency is just a digital non-crypto transaction method that is owned by an elite few.
Initially the interfacing of crypto into mainstreem is like having 1 wordprocessor computer in a manual typing pool (circa 1970-1980).... difficult to manage.
But with "apps" I'm not so sure the integration will take as long.
Maybe "visa" will be required (elite owned) or maybe not.
If I want to give you or a shop keeper money for goods, then we both just need an app. Like that iPhone "bump" app to transfer a file.
But it's going to be an interesting 6-12 mths coming up IMHO
$0.02
I agree with you. Technology today can impact change more quickly than 20 years ago. I think 6 to 12 months the pace will pick up very quickly, but I think we are 5 years or more from a decentralized currency/network that threatens a centralized payment network and has mass adoption.
I think the centralized vested interests will see to it that the decentralized scenario you describe will never happen, by force if necessary :-)
It has to exceed their control. They'll try to creat their own or buy whatever looks promising. The interesting thing about cryptocurrencies is that the cost of creating your own currency or an app on top of an existing currency is fairly low.
But assuming my coffee shop takes crypto and so does my landlord as they both have an "app"
I just transfer crypto as needed.
I don't need FIAT unless I want to deal with someone still on that old system.
At least thats the way I'm seeing it. (prob in 3-6mth at the current rate of progress!! :-)