Major Hurdles to Cryptocurrency Adoption in Late 2024
We are in 2024, and cryptocurrency is not a new kid on the block. However, it has not become as popular as it should have been by now. In this blog, we will examine the major hurdles to cryptocurrency adoption in late 2024.
For the uninitiated, cryptocurrencies are digital currencies secured by cryptography and based on blockchain technology. Bitcoin and Ethereum are the two well-known cryptocurrencies.
The biggest hurdle to Cryptocurrency adoption to date is the safety and security of transactions. Let’s find out why.
7 Major Hurdles to Cryptocurrency Adoption
#1 Lack of Knowledge
Cryptocurrencies work baffles not only laymen but also people who are technically competent, and the blockchain technology on which most of the cryptocurrencies work is difficult to understand. It is difficult to explain to everyone the advantages it provides over conventional financial systems and the novel uses it can be put to.
This has been the biggest challenge for cryptocurrency adoption since the beginning and will continue even in late 2024. As a result, cryptocurrency’s widespread adoption seems to be a far-fetched dream.
#2 No Regulatory Frameworks
It is comparatively unregulated, as there are no laws in place to control its use worldwide. This lack of regulatory framework or authority also prevents many people from using it. Fear of fraud and financial crimes is widespread in conventional banking and economic systems.
Hence, trusting a completely new system, which is difficult to understand and implement, will be difficult even in late 2024.
#3 Network Latency
As more and more people use cryptocurrencies, the network becomes congested. Due to delays in processing, accepting payments in cryptocurrencies becomes difficult for businesses and outlets.
Developing technology that can speed up cryptocurrency transactions remains a major
hurdle.
#4 Lack of Trust
The biggest hurdle to the adoption of cryptocurrencies is the lack of trust, which results from all the points mentioned above. Without trust and acceptance, it is difficult to further increase its adoption.
It does not have user-friendly account handling and interface like conventional banking, which is now available at the fingertips on mobile devices.
#5 Irreversibility
Once a cryptocurrency transaction has been executed, it cannot be reversed or stopped. This makes zero error a necessity in cryptocurrencies, which is difficult to execute because there is always a chance of human error.
Thus, if a person commits an error while executing a transaction, there is no way to get the money back.
#6 Environmental Damage
Bitcoin, which is one of the types of cryptocurrency, requires a lot of computing power, thus consuming lots of electricity. This is also a major hurdle as cryptocurrencies may, in fact, promote the burning of more fossil fuels, increasing pollution levels.
It is estimated that Bitcoin consumes about 91 Terawatt-hours (TWh) of electricity in a year, which is more than what Finland uses in one year.
This is due to the highly complex processes needed in creating cryptocurrencies, which involve making use of computers with large computing power.
#7 Volatility
Most cryptocurrencies, including Bitcoin and Ethereum, are extremely volatile, which makes it difficult for buyers to purchase them. They cannot foresee their future earnings due to its volatility.
Buyers have to comprehend the risks and dangers associated with variations in the valuation of Digital currencies. Cryptocurrency exchanges need to provide buyers with instructional
resources or guides to help them analyze the market and make decisions.
“There were over 9000 cryptocurrencies in 2023, but the top 20 cryptocurrencies make up nearly 90% of the total market.” (Source: Statista)
Having seen seven major hurdles to cryptocurrency adoption in late 2024, let’s look at some
of the major cryptocurrencies individually and how they are performing currently.
Major Cryptocurrencies Being Used in 2024
Although there are many cryptocurrencies in use at present, only some of them are popular. Let’s have a look at 4 of them.
- Bitcoin(BTC)
It was developed in 2009 by Satoshi Nakamoto and runs on blockchain technology. It involves a ledger that logs transactions across thousands of computers. Its price has increased by leaps and bounds, and has become well known.
The price of one Bitcoin in May 2016 was around $500, and in April 2024, the price was around $64,861, which is a growth of 12,872%.
However, Bitcoin transactions do not have legal protection and cannot be reversed. It takes about 10 minutes to validate most of the transactions.
- Ethereum (ETH)
It is both a Blockchain platform and a cryptocurrency. It has applications like smart contracts, which have the feature of automatically getting executed, if certain conditions are satisfied.
It has witnessed tremendous growth in terms of value, which has increased from $11 in April 2016 to $3268 in April 2024.
It is less well-known than Bitcoin and has less brand recognition. Although it is a decentralized blockchain, there are some centralized entities that can make decisions. It has severe scalability issues, as with an increase in the number of users, the transaction fees and confirmation time both increase.
- Tether (USDT)
Tether is a stablecoin unlike other cryptocurrencies, which means it is backed by fiat currencies like US Dollars and euros. It hypothetically keeps a value close to one of these currencies. Thus, it is favored by investors who do not like the instability of other currencies.
The main problem with Tether is the company’s lack of transparency. It is vulnerable to legal, security, and financial risks. It has not maintained consistent banking relationships throughout and is restricted for use in some countries, including the USA.
- Binance Coin (BNB)
This is a cryptocurrency that can be used for trade and paying fees on Binance, which is amongst the largest crypto exchanges in the world. It was launched in 2017 and, at present, can be used for processing payments, trading, and booking travel arrangements.
Its price in 2017 was just $0.10, which increased to $549 in April 2024.
Binance’s major disadvantage is that the supported fiat currencies are very few. It has had several security breaches in the past and may charge withdrawal fees for certain cryptocurrencies.
To Sum It All Up…
Having seen the major hurdles faced by cryptocurrencies, it is difficult to say when they will enter the mainstream market or be adopted by the masses. However, there is some light at the end of the tunnel, and they will become increasingly used in the coming decades if not years.
The governments of several countries have either launched their own cryptocurrency or are in the process of doing so. However, the hurdles we discussed, which are hindering its large-scale adoption, need to be addressed soon.
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Author Bio:
Victor Ortiz is a Content Marketer with GoodFirms. He likes to read & blog on technology-related topics and is passionate about traveling, exploring new places, and listening to music.
