If you are a true Crypto believer, you must have dreamt about a world with complete crypto adoption. In the world of crypto adoption, digital coins, tokens, Defi, Metaverse, and NFTs all enjoy the same level of acceptance as fiat, banks, physical arts, and other things.
What is a Crypto Adoption?
The word "Crypto Adoption" means the process through which the existing human society will incorporate cryptocurrency into their lives and start using it like other currencies. It also means increasing the number of cryptocurrency users by educating people about it.
Crypto adoption has been a booming topic lately because we hear favorable news and headlines almost every day. Despite the crashing crypto market and dozens of frauds and Ponzi schemes coming under the light, Crypto adoption has been rising unstoppably.
But what factors impact this Cryptocurrency adoption? We will discuss this in the blog below.
Social influence is an important variable that affects Crypto adoption. Many people still throw cold water on Cryptocurrencies and perceive them as an extremely risky asset. The connected risks and technical difficulties with cryptocurrency stop people from giving it a chance. However, this social influence is gradually shifting to the positive side. As per the crypto adoption data of this year, crypto ownership in India rose from 14.7% in November 2021 to 23.4% in January 2022 and shot to 29.9% in April 2022. Despite this, much work is still to be done to shift social perceptions of crypto to the positive side.
More involvement in crypto is only possible if more people know about it. However, most people either have an idea or need to learn about cryptocurrencies. As a result, it becomes hard to inculcate trust in them for crypto. An educational environment can solve this issue and will clear many crypto-related misconceptions from people's minds. People are reluctant to learn about cryptocurrencies because of the complexity and technical jargon; a quality crypto education is necessary to make the subject easily understandable. School and college curriculums should incorporate crypto & blockchain in their education modules. This way, the next generation would easily comprehend the tech-heavy crypto articles and news.
The next critical factor that hinders its adoption is Political support. Cryptocurrency and politics need to be on the same side instead of the opposite to establish global adoption. The regulators like central banks, FED, and other important financial institutions must accept digital currencies as part of their finance game. Though almost 100 countries are already evaluating CBDC (Central Bank Digital Currencies), political authorities seem to be taking baby steps toward crypto adoption. A popular opinion is that governments are afraid to give control of finances by welcoming something decentralized and distributed like crypto. However, whatever the truth is, one thing which is for sure is that political support will be the game changer in crypto adoption.
The returns in the cryptocurrency market have been groundbreaking in the past decade. After hitting $1 eleven years ago, Bitcoin has hiked 4400000%. If we compare crypto with any other asset class like real estate and bonds, it has outperformed almost all of them in its first decade only. This feature of Cryptocurrencies to give unexpectedly high returns is a great contributor to shaping crypto adoption. Most crypto investors enter the crypto market in the bull run to grow their investments faster than other investment options. Various survey data indicate that crypto adoption increases more quickly in bull markets than bear markets. Hence, the upcoming scenario of the crypto market in terms of price change will also decide the rate of crypto adoption.
INTER EXISTING ISSUES
To be able to handle global adoption successfully, cryptocurrencies have to be highly scalable and secure. It requires more developments and upgrades in the crypto space to exceed the scalability of different currencies. The Lightning network of Bitcoin, the Sharding technique of Polkadot, L 2, and L 3 solutions are some ongoing projects that can be possible solutions to achieve scalability for cryptocurrencies. The popular blockchain trilemma that decentralization, scalability, and security can not coexist in a network also needs to be addressed to make global crypto adoption possible. It is excellent that the Crypto community is already aware of these problems and is working its finger to the bone to resolve them.
There was a time when crypto was just a niche, but now it has become a whole new investment category. It has already come a long way from nothing to something and now is moving towards becoming everything soon. Crypto adoption is inevitable, and the factors we have discussed above will determine how much sooner or later it will happen. So, if you are already in the crypto industry, get ready to see a high wave of global crypto adoption anytime now.