By Anthony DiMarsico, CEO of Banxe
In essence, the evolution of payments has been a constant theme since the concept of trading was born thousands of years ago. The human race has evolved from trading livestock to the first bi-metal payments invented in Lydia, gold, cheques and now online banking has become mainstream – and the next evolution is the merging of cryptocurrencies and traditional payment methods. But, each step in the evolutionary process of payments has taken time to gain trust, and this is the juncture that cryptocurrency finds itself at, since the conception of fintech around 30 years ago.
Humans instinctively distrust and fear change, but as history shows us, it is inevitable, and the same is true when it comes to how we bank and the currencies we use.
However, if cryptocurrency is to become a daily part of our lives, just as debit cards have become, then it must remove the veil of mystery that shrouds it. Complex systems and platforms, a misunderstanding of the risk factors around trading in crypto and convoluted terminologies are all barriers holding people back from trusting cryptocurrencies. History also shows humans don’t just fear change, but we also fear what we don’t understand.
Gaining mainstream trust by removing complexity
As alluded to, cryptocurrency as an industry must gain people’s trust if it is to become a mainstream payment method. And trust is a major barrier to crypto – research suggests just 5.6% of the UK and US populations trust it as a safe investment. This is a barrier that must be tackled head-on, but it can be overcome.
A key step to doing so is removing complexity, and facilitating a wide understanding of using crypto. The crypto industry should break down convoluted terminology and complicated explanations, making it easy for anyone to understand how crypto works. It’s important for the crypto industry to speak the language of its target audience, making it more accessible to all.
One of the biggest hurdles faced by a beginner in cryptocurrencies, but with an interest in trading, is the amount of research it takes to find out how to begin their crypto journey. This is a key step that has often been missed, and is holding back crypto from becoming trusted. Not many people have the time and patience to read page after page of complicated terminologies and formulas.
So, if people can’t understand the product and can’t find easily digestible resources to learn, they will naturally distrust and misunderstand it. Consequently crypto will likely never be truly inclusive, and a dark cloud of mystery will continue to shroud it in the eyes of the wider public. It is crucial the barrier of understanding cryptocurrencies is removed if it is to be widely trusted.
Importance of regulation
Of course understanding is of huge importance, but some may seek further assurances too – a rubber stamping of sorts. It is just as important for the crypto industry to seek legislative regulations, as it is to communicate and explain in the right ways, if it is to earn the trust of the mainstream. Different geographies have specific financial regulatory bodies, and in each target market, certifications from the varying bodies should be sought.
There have been cases of crypto scams and pyramid schemes, and reputations such as this can be hard for an industry tobe rid of. However, there is barely an industry in existence that has been tarnished by some sort of scandal, and this is why it is all the more important for legitimate crypto providers to stand out from nefarious actors by proving legitimacy through being regulated by governing financial bodies.
Understanding the risks
A misunderstanding of how crypto works leads to people thinking it is riskier than it actually is in reality – and this leads to fear of adopting crypto. But the truth is, every single transaction has an element of risk attached to it. Crypto is more secure than its perception may suggest. Indeed, cryptocurrencies USDT and USDC are tethered to the USD (US Dollar) and other physical currencies, and therefore their values will not fluctuate tremendously.
Greater transparency of the risks involved must be provided by the crypto industry, if it is to combat the perception of being highly volatile and far too risky for the risk-averse.
The importance of communication, transparency and access to information
Misunderstanding, confusion, miscommunication and distrust are all huge barriers that crypto currently faces in its quest to break into the mainstream. But it is a quest that is reaching major milestones. As of Nov. 26, 2021, the combined market value of the world’s bitcoins totalled over $1.03 trillion.
If digital currencies are to continue to grow in value and widespread, everyday use, then the industry must remove the veil of mystery that still surrounds it in the minds of the many. The good news? The steps to do so aren’t all that complicated – but the ways in which using digital currencies can be used for good must be communicated and explained more simply.
