How many challenges does cryptocurrency have? Can it overcome the obstacles and shine as a bright currency?
These might be some of the many questions in your mind when it comes to cryptocurrency.
Cryptocurrency is still the leading buzzword in the financial world and protagonists think that it will revolutionize the usage of money.
The ability of cryptocurrency to work in a distributed environment with enhanced safety is the core behind its popularity.
But any new currency goes through a hype stage, and it takes some time to get rid of all the challenges and use it properly.
Cryptocurrency is not different here.
Let us find out the major obstacles in the way of the mass adoption of cryptocurrency.
What is Cryptocurrency?
When you are looking to use any new technology, you should first understand it.
The same applies to cryptocurrency.
Cryptocurrencies are digital currencies that exist on blockchain technology.
To reduce the risk of fraud, cryptocurrencies are protected by cryptography which is based on complex mathematical problems and is hard to break.
You can buy cryptocurrencies through a crypto exchange platform such as Binance, Coinbase, and more.
You should remember that cryptocurrency works in a decentralized manner which means that no third party such as a bank or government can interfere in it.
In addition, you can make a lot of money with cryptocurrencies when the crypto market is bullish.
Carl Runefelt, alias, The Moon, is a global crypto leader who is pushing for the mass adoption of cryptocurrencies.
He says, “When Bitcoin or when the world is in some type of volatility some kind of uncertainty, I think that is generally something strong for Bitcoin because Bitcoin has zero third-party risk so no matter what happens, you never have any third-party risk against anything. So, Bitcoin is the safest place in the world to put your money or put your wealth.”
Top Cryptocurrency Adoption Challenges
People were unknown of the concept of cryptocurrency when it was introduced, but since then, cryptocurrency has come a long way.
Still, there are many challenges in the way to the mass adoption of cryptocurrency.
Listed below are some of these challenges.
Lack of Understanding
One of the biggest hurdles in the way of cryptocurrency is its lack of understanding.
People start investing in cryptocurrency and suffer losses because they do not build a comprehensive understanding beforehand.
This is a huge challenge.
Cryptocurrency is a virtual currency that exists online, and you should carry out rigorous market research by analyzing current trade charts before investing in it.
Another challenge with cryptocurrency is the low scalability of blockchain technology.
At present, the number of crypto users is small, and it is needless to say that Bitcoin and Ethereum platforms are finding it hard to deal with the situation.
What will happen when the number of crypto users increases?
The low scalability of blockchain will make the process of crypto transactions longer and at a higher cost than usual.
High Energy Consumption
You probably have heard about mining in cryptocurrency.
Mining requires you to solve complex mathematical equations using your computer to create a cryptocurrency.
But this process requires higher energy consumption that might not be possible for you to overcome the situation.
According to an estimation, miners at present are using around 0.3% of the world’s electricity to create cryptocurrencies.
With the rise in the number of miners, electricity consumption will also increase making it difficult to meet energy requirements.
A major hurdle in the way of cryptocurrency adoption is its volatility.
Carl on his YouTube channel, The Moon, says, “If you want to make money through crypto, the easiest way is to buy at a low price and sell when it is high. Also, you can intelligently take advantage of massive volatility and volume.”
Since cryptocurrency is a decentralized currency, it is free from any regulations.
Neither a bank nor a government can intervene in cryptocurrency.
This makes cryptocurrency a volatile asset with price fluctuations.
Things to Remember When Buying Cryptocurrency
You can face multiple challenges when you are investing in cryptocurrency, but you can minimize the risk by following these simple tips.
- Invest what you can easily afford to lose.
- Never share the key to your crypto wallet with anyone.
- Read the current trade chart of a cryptocurrency before buying it.
- Avoid trusting market sentiments because they are a delusion.
- Choose the right crypto exchange platform after research.
- Cryptocurrency is a long-term investment, and you should zoom out on the short-term benefits.
There are still many difficulties that are stopping people from investing in cryptocurrency.
But you can see that with a sound investment strategy, people are making a lot of money with cryptocurrency. You can follow the above-mentioned tips to make handsome profits in cryptocurrency.