Adoption is frequently discussed in the cryptocurrency community. However, how many cryptocurrencies do you see being used in the real world? A present, there are two types of adopters:
- Questionable adoption: Consists of investors using other cryptocurrencies simply to leverage and earn more Bitcoin. In general, this type of adopter never intends to use the product/service the project is creating. Instead, these adopters are only interested in altcoins as a speculation vehicle.
- True adoption: When an investor understands the value proposition of the cryptocurrency project they are investing in and are open to the idea of actually using the coin/token once the ecosystem is built.
The problem for true adoption is that cryptocurrency markets are currently built for speculation. This is because the vast majority of projects either:
- Do not have working products yet.
- Are struggling to gain real world adoption.
With peer-to-peer cryptocurrencies like Bitcoin, the intention was always that it should be used as electronic cash. Sure, people talk about peer-to-peer cryptocurrencies being a store and transfer of value. However, when compared with stable fiat currency, critics argue that:
- Store of value: Currently cryptocurrencies, which can commonly fluctuate 20% in price in a single day, are a poor store of value.
- Transfer of value: With cryptocurrency transactions, we must ask ourselves who the value is being transferred to and is it a commonly accepted payment method? Right now, the reality is that the majority of cryptocurrency transactions are not being processed or accepted in the real world and therefore cannot be considered a good transfer of value. Instead, the majority of crypto is being transferred to and from cryptocurrency exchanges. For peer-to-peer cryptos to be considered a true transfer of value and electronic cash, they need to be widely accepted as a payment method.
True adoption of cryptocurrencies is too low to be used as peer-to-peer electronic cash at present. Acceptance of cryptocurrencies as a method of payment is the exception and not the rule, creating a large barrier to the overall function of all cryptocurrency.