On the 7th March, ex-footballer Michael Owen tweeted: Looks to me like blockchain is here to stay. I’ve been involved in football my whole life and I’m now working with blockchain specialists on a really exciting new football project. Many were sceptical, particularly of Owen’s tech credentials. One journalist had the most withering reply: Hello Michael, do please explain why “blockchain is here to stay”. Any particular blockchain you have in mind? Do you have a view on proof-of-work vs proof-of-stake? This exchange is emblematic of the big problem cryptocurrency faces. There are a good number of enthusiasts—and a good number of sceptics—but the majority of people have no strong opinion one way or the other. Crypto’s success depends on winning those people over, and celebrity endorsements are clearly not working. So what will?
A familiar pattern
Crypto adoption is following a familiar trend. From 2015 until today the number of people using crypto is very similar to the number of internet users from 1998 until 2005. If this continues, then we should see a billion crypto users before the decade is out.
Internet adoption wasn’t just down to how useful it was, but how easy it became. Today it is as simple as asking for a Wi-Fi password. Ubiquity depends on simplicity, and with crypto, enthusiasts are just unable to say the same—yet.
To buy and pay with crypto is to engage with complex systems, quite different from the simple pay-and-go we’re used to. First you need to choose between a broker or a crypto exchange. Brokers are simpler, but exchanges tend to be cheaper. Once verified, you then need to deposit fiat currency (make sure your broker accepts fiat currency!) and place an order. When using an exchange, there is still a choice of whether to store the cryptocurrency on the exchange, or on a hot or cold wallet.
There are signs that this is changing, however. Card schemes are starting to get behind crypto and supporting branded cards. This is the sort of celebrity endorsement that may actually move the needle—ex-footballers aren’t trusted when it comes to moving money around, but brands like Visa and Mastercard are. Better still, there are now a handful of large, established crypto exchanges who are trusted, and as their brand visibility and reputation spreads, crypto will certainly move up the trust scales. The combination of these trusted household names, plus the simplicity they offer, will facilitate the uptake of crypto and deliver a more ‘usable’ environment for cryptocurrencies.
Education and building trust
According to Pew Research, 16% of Americans have invested in, traded or used cryptocurrency. Another study by the crypto platform Gemini showed that 64% of Americans were interested in using cryptocurrency. That is nearly half of US adults keen to get involved in crypto, but with no experience yet.
Turning that interested half into regular users will require educating and building trust from consumers and businesses. For example, crypto exchanges should be doing more than making buying and selling crypto simple. They should also be looking at how they can make the wider use cases of crypto better known and understood.
For instance, crypto exchanges should be exploring and simplifying crypto use cases for their customers, guiding them on their way. People are keen to use crypto, and by harnessing that enthusiasm, exchanges will be pushing at an open door. Crypto can be much more than just a trading or investment option, but by leaving these other options difficult to explore, people are far more likely to see crypto as a passing fad.
There’s also the opportunity for crypto companies to connect up banking payments and current account-type facilities, offering a truly modern experience for their customers. Adding banking payments not only means that crypto companies can save on acquiring fees, they can also create stickier customer relationships—it’s one more step towards the simple “one-click” experience that they are used to.
The potential of cryptocurrency is that it will offer choice—that people will be able to personalise and choose how their money and assets work for them. For instance, it can make high speed international remittances simple and near-instant, large transactions safe, and combinations of fiat currency, digital assets, and cryptocurrency straightforward. But we need to build towards this future, creating new crypto enthusiasts as we go. Trusted brands, relatable use cases and continuing to build simple experiences will be key to this, not celebrity endorsements.