The blockchain and cryptocurrency industries are rapidly expanding, and more individuals and businesses are paying attention to crypto and blockchain as a result.
In a PwC survey of 600 company executives, 84% reported that their companies were “actively involved” with blockchain technology, But the new participants in the blockchain and cryptocurrency industry are not only financial institutions and tech companies, consumers are using blockchain technologies too. Although it can be challenging to measure cryptocurrency demographics, one expert estimated that the crypto user base increased by a factor of 14 in 2017. And in a May 2018 analysis, Chris McCann estimated that 20-30 million crypto users exist worldwide.
Although these numbers indicate that interest in cryptocurrency is undoubtedly increasing, crypto is still nowhere near mainstream. 30 million crypto users represents less than one percent of the globe’s estimated 4.2 billion internet users.
There’s some evidence that crypto users demographically resemble the same group who dominate the rest of tech (young men); this suggests that crypto has difficulty finding footing with groups outside of Silicon Valley and that there is a lack of diversity in the industry (a proven innovation driver).
And not all studies of business and corporate interests in blockchain have been as optimistic as PwC’s survey. A Gartner CIO survey found that only 1% of respondents had already invested in, or deployed blockchain technology, while 34% reported no organizational interest, and 43% said they had blockchain “on the radar” but no actions planned.
Crypto adoption still has a long way to go, and crypto enthusiasts should be rooting for more people to gain an interest. In John P. Kelleher’s analysis of Bitcoin’s potential long-term value, Kelleher points out that Bitcoin can only maintain its store of value feature if it also continues to function as a medium of exchange. In other words, Bitcoin is worthless if no one is out there is spending it. The same principle holds true for virtually all cryptocurrencies; as more and more people use cryptocurrency, it grows closer to having a stable and fundamental value. And at the same time, blockchain technology itself becomes stronger and more resilient as its user networks grow. More users lead to more node operators; a robust network of nodes is necessary for a blockchain ledger to be truly immutable and decentralized—the two qualities that make blockchain so revolutionary in the first place.
So what’s holding back widespread cryptocurrency use? A group of closely related obstacles stands in the way of mainstream adoption.
Lack of User-Friendliness
To purchase a legacy cryptocurrency like Bitcoin or Ethereum, users only need to set up an exchange account and transfer fiat currency to that account. But to purchase most altcoins, users typically need to set up an account at another exchange and transfer their legacy cryptocurrency to that account to trade it for altcoins–an inconvenient multi-step process.
Many elements of traditional finance are considered user-friendly regardless of the user’s technical knowledge, but when you enter the cryptocurrency markets beyond participation in legacy crypto such as Bitcoin, getting involved can be an intimidating process.
Amplify Exchange is tackling crypto’s user-friendliness and altcoin access issues by allowing direct fiat-to-altcoin transactions to cut down the transfer time delays, fees, technical steps and technical know-how required to participate in the full crypto economy.
Crypto has a security problem. One security firm identified $1.1 billion in crypto thefts that took place between December 2017 and mid-2018. A vast portion of those stolen coins was taken from centralized exchanges that process all transactions in one centralized location (a prime target for hackers). Decentralized exchanges are far more secure but rely on slow and technically challenging transaction procedures and typically lack crypto’s most popular trading pairs.
Amplify Exchange is a hybrid exchange; we are syncing a traditional distributed version of the transaction ledger with a decentralized version through the broad and resilient network of Amplify nodes. This hybrid design gives users the speed, accessibility, and trading pairs of a centralized exchange through the highly secure infrastructure of a decentralized exchange.
Lack of Altcoins
We believe altcoins will play a crucial role in the future of blockchain technologies. Legacy-cryptos like Bitcoin and Ethereum are useful, but they can’t fulfill all of the unique needs people have. A flourishing altcoin environment lets users find and use the blockchain platforms that best suit their needs.
That’s why Amplify Exchange is providing fiat-to-altcoin trading pairs for altcoins; these conversion options make altcoin participation easier for newcomers and bolsters both the altcoin sphere and the user pool that has access to it.
Speed, Time, and Energy
Blockchain experienced a breakthrough moment in late 2017 when skyrocketing Bitcoin prices made mainstream headlines. But the moment also exposed some of blockchain’s scalability issues, as a network bottleneck resulted in transactions fees that were upwards of $28 and took a long time to complete. Scalability concerns also surround blockchain’s energy usage–the Bitcoin network currently consumes the energy equivalent to the entire country of Ireland. Transaction speed, transaction costs, and energy consumption are all serious obstacles that prevent the mass adoption of blockchain technologies and cryptocurrency.
That’s why Amplify is using a Proof-of-Stake consensus algorithm on the Bridgechain ledger–a more energy-efficient consensus protocol than Proof-of-Work, Because a Proof-of-Stake consensus algorithm uses network resources more efficiently than proof of work, this leads to cheaper, faster transactions. And our unique Popularis protocol avoids the centralization problems inherent to standard Proof-of-Stake protocols.
Blockchain has come a long way, but it still has not experienced mainstream adoption.
But Amplify aims to resolve the usability obstacles which prevent greater adoption, which will allow individuals at any experience level to participate in the blockchain and cryptocurrency industries.