Most would agree that 2019 wasn’t a big year of cryptocurrency adoption–however, the industry did come closer than it ever had before. The introduction of Facebook’s Libra, Binance’s Venus, and announcements of plans by China and other nations around the world to begin or continue developing blockchain-based national currencies brought crypto further into the “mainstream” than ever.
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Adoption was also arguably boosted throughout the year by political turmoil and boosts in the price of Bitcoin, as well as increased awareness regarding personal privacy and financial sovereignty.
However, in the grand scheme of things, crypto still has a long way to go–in 2018, EOS’ chief technical officer Dan Larimer suggested that a technology does not become a part of everyday life for most people until it has been proven to make their lives easier without being high-risk or high-cost.
And indeed, there does seem to be a cyclical nature in the way that new technology is adopted into the “mainstream”–and it can take time. For example, although email was invented in the early 1970s, it did not become widely available or widely used until the 1990s, and its usage has grown considerably since then; if cryptocurrency is operating on a similar timeline, it could be ten to twenty years before it becomes truly ubiquitous.
Still, progress has been made, if reflected in nothing but the Bitcoin network alone: in the last five years, the number of Bitcoin transactions sent each day has increased dramatically, and some analysts argue that this will continue to increase in the near future.
So–here, now, in 2020–who’s actually using Bitcoin? What are they using it for? And what are the factors that are known to be hindering cryptocurrency adoption?
Crypto adoption can look different depending on where in the world users are
According to the popular narrative, the ways in which cryptocurrency is used, to some degree, seem to fall along several lines, including the line between the developing world and the developed world, and the line between users and traders.
Let’s start with the first of these lines. There is, arguably, a major and important difference between the ways that crypto is used in countries with developed, stable economies and those without.
In 2018, Dan Larimer said that “so far, the early adoption of Bitcoin and cryptocurrencies is very philosophical. It’s inherently limited to people who actually believe in the cause. That’s true with all early adoption. It’s true with electric cars. It’s true with blockchain.”
However, this statement is much more likely to be true for individuals living in countries with stable economies, who may not necessarily have a need to use cryptocurrency; for example, to protect the value of their savings in the face of an economic or political crisis. Instead, these users tend to go out of their way to use cryptocurrency to pay for something–perhaps something that isn’t completely essential.
For example, 2gether, a cryptocurrency payments app based in Spain, told Finance Magnates that according to a recent survey of its own users, “the everyday crypto user is a highly educated millennial male.”
Indeed, according to the results of the survey, “the majority of crypto spenders are between 26 and 45 years old”, and work in white-collar professions “the most common professions among users are lawyers, accountants, and economists. Typically, these users don’t pay for necessities, like housing or bills, with their crypto; instead, 2gether’s users “spend their cryptocurrency mostly on food and at restaurants.”
Could crypto payments apps boost adoption in developed countries
Of course, this doesn’t mean that using cryptocurrency primarily for paying for things in restaurants couldn’t eventually lead to widespread adoption, particularly within developed countries.
After all, Bakkt will test a consumer app with Starbucks in the first half of 2020, a move that may spark some additional interest in crypto from the “outside world.”
Who would have thought the next #banking icon would be the #starbucks logo? Kudos to them for teaming up with #Bakkt!#Crypto #Blockchaintechnology
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— Timothy Yohe (@TimYohe) January 20, 2020
The bill solves this problem by stipulating that “U.S. federal income tax is due on gains in cryptocurrencies only if the gain on a particular transaction is greater than $200. Accordingly, if the bill passes, using cryptocurrency for routine small transactions such as buying a sandwich would not involve the hassles of the current tax law.”
The “Keep Big Tech Out Of Finance Act” and the “Stablecoins Are Securities Act,” on the other hand, could make cryptocurrency law all the more complicated. Both pieces of legislation were written as reactionary tools to stop Facebook’s Libra from launching, but they could have a host of consequences–possibly unintended–for the industry as a whole.
However, even though negative legislation could slow the process of adoption, it’s ultimately up to the individuals who use it to determine the future of the industry of the technology. Therefore, Charles Phan says that crypto-hopefuls should keep their eyes on the prize: “Cryptocurrencies like bitcoin and ether were built on grass-roots movements from the bottom up, so continued adoption is essential for long-term survival,” he said.
“The aim of the game is to create a new financial and economic system to make the world a better place: that can only be achieved if cryptocurrency becomes part of everyday life.”