Will cryptos ever make it?

Here are the latest numbers:

  • Over 42 million bitcoin wallets had been set up globally by Dec 2019
  • An estimated five percent of Americans hold bitcoin
  • There are 7.1 million active bitcoin users
  • Leading exchange Coinbase has over 13 million users

This can get evert crypto enthusiast to raise his or her arms in jubilation. But if we turn the numbers around that leaves 95% of the American population without a crypto wallet … and only less than 1% of the adult population is an active bitcoin user. Seriously - the crypto community has come a long way - but in some respects, we have come nowhere.

It is no secret in many ways I am still a noob in the crypto community. That means I still have to look up a term or two when reading a technical white paper, and there are plenty of top influencers that I don’t follow on twitter yet.

But it also gives me a perspective on things as an outsider. An aspect that more than ever is essential if new monetary systems are ever to fulfil all its promises of decentralized money power, less corruption and a better world for all in general.

Here are some thoughts on the lack of crypto adaption to spur new conversations and can help build a bridge from the crypto world to the outside world.

Everyone wants fiat
As CMO of Tagion, I get a lot of approaches from crypto media, advertisers, and influencers. Some are on the rise; some has already established themself with a broad audience. Not all, but most of them will trade publicity for money. That is not much different from old media. But the thing is, most of them will only deal in Dollar or Euro.

Just think about it for a second. So a news outlet approaches me. The top story on that day is ‘Bitcoin on the rise’, and all they want is USD - and USD only. That is close to hypocritical in my view.

I get that most crypto coins will not pay the mortgage, and fiats still make the world go round. But why not promote the use of cryptos by asking for 20% of the fee in, e.g. Ripple or Tether?

If the community itself is reluctant to accept cryptos, then how will it convince the rest of the world to do so?

(I am delighted that the partners we found at Tagion are not solely in it for the money - they want to help change the world. )

Bitcoin for criminals
I got an email the other day:
Pay $1000 in bitcoin to the underneath address (remove***from it):

bc1***qhc55ulr2qacf8e3cqs9q93a9ez5lc6l6f829e5

You could be asking yourself why the hell would you do that? Well, put together yourself due to the fact I am going to tremble your world at this moment. I had a serious spyware and adware infect your computer system and also record movie of YOU (using your cam) while you browsed ‘adult’ web sites.

To date, this is the only approach I have had from someone who only wanted cryptos. I can’t be sure, but I am guessing that I am not the sole recipient of emails like this and in the public opinion, cryptos are something that belongs to the dark internet and criminals.

So why should the ordinary Joe start using something that he associates with crime and blackmailing?

We, as crypto ambassadors, can give him a lot of logical sound reasons. But reason only leads to conclusions; feelings lead to actions.

So how can we make the public feel that it makes sense use alternative payment methods to cash and credit cards?

I have my hopes set on in-game payments and charities for starters. If I am involved in an exciting game, I will go a long way to stay in it. As gaming is already an alternative world, the gap to alternative payments is lower than usual.

Recently a newly appointed director of a Danish NGO was complaining about the fees they had to pay to credit card providers every time they made a national collection. For all Danish NGOs, the cost amounted to a total of 6.2 million USD (or 860 Bitcoin.

After significant political pressure, the payment provider redrew the fees for NGOs. But the issue still lurks. If my favourite NGO asked me to make donations in cryptos for them to provide more help, I probably would.

To much pump and dump
My best mate works in an IT department at an international bank. To him and most of my other friends, cryptos are still a bit shady, and mostly an investment object.

According to Bloomberg, Bitcoin has been 14 times more volatile as the most traded currency pair. That is just too much. No wonder most people do not see Bitcoin as a serious alternative to global currencies. That kind of ups and downs is not promoting trust in a coin - rather the opposite.

So how can I get my mate to change his mind about cryptos? That will only happen the day we read as many stories about people turned millionaire by investing in Dollars as in Bitcoins. In other words, when those stories have vanished.

So what can we do
In my humble view, I believe that the financial industry is in the same place as the music industry was 20 years ago. Compact Discs were still selling like crazy, but the first torrents and Pirate Bay had just emerged. At first, this alternative to free music was only for the techies. But suddenly everyone was able to download free MP3s. Now the shit had hit the fan.

The industry tried to fight piracy, handing out fines, involving courts and politicians. But the damage had already been done and one music store after the other closed.

It was not that people wanted to break the law; the benefits for fast and easy access to music was just too good to ignore. The only option was to make those benefits available in a legal way. The rest is history.

Right now, the large majority of the world sees crypto the same way as people viewed the first torrents.

The crypto project that will succeed is the one that makes stable and secure financial services available in a cheap, fast and easy way.

… and if the first adaptors are others that the mob it will also help a lot.

If you want to discuss my points of view or change my mind about some things (I promise to listen with an open mind). Then join the discussion here …

3 Likes

Good comparison to the music industry, but with the monetary and banking system we should remember that they are hard controlled by states and regulation as well and the current incumbents in the market. More, I don’t think the innovation within the DLT space has solved the core issues yet, but the space is maturing and more real projects trying to solve core problems evolve. As an example, when a discussion in the DEX community around difficulties of price discovery and matching is solved with taking average prices from central exchanges or whatever to solve a core task of an exchange, then the problem is not understood and the solution does not make any sense. Anyways, returning to some of the core issues.

  1. We need closed-loop payments: It should be seamless, better and much cheaper to use crypto, exchange to other virtual currencies, and for legacy the off- and on-ramping should be seamless as well. We need a full true decentralised infrastructure. That is not going to a central exchange buying crypto, depositing it on another custodian service being able to spend it with a VISA card. That is a very expensive and cumbersome process, which cannot even compete with the current system.
  2. We need independent monetary systems that are intrinsic stable enabling trust and decentralised settlements. It is not a solution to create all kind of asset or currency backed coins, because they are by nature bound to their assets or the dollar and can never become independent and stable by themselves with the trust backing them.
  3. We need scalability and sustainable ecosystems/communities meaning good governance systems to enable a healthy development of the concepts and technology over time.
    So yes, we will hopefully see some of the same pattern with incumbents and regulation trying to defend the old paradigm now, but it will be of the magnitude of a million. Because, it is the Money Power we are dealing with, which is very powerful and profitable to have.
    But, maybe the current crisis will accelerate the process at least in Europe, because the Euro cannot sustain the imbalances of the north and south, which are exploding right now. I think at least a small country as Denmark with more than 50% export and high positive net export and high savings will get severe problems defending the Danish kroner to the Euro meaning the current politics will be abandoned with huge savings losses as a result. Changes are coming, and this was a long post - sorry.
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Agree - but even more important it should be easier to use than FIATS - otherwise, why make the swap to crypto … and that is why the Visa version is popular. It is just easier than creating a Bitcoin wallet.

Hard to argue with that - that is why I love the Tagion project

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