What are the hurdles to making cryptocurrency part of traditional economies?

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Board Member, Advisor, Executive Coach in Software, Self-employed
Given the executive order (EO) on Ensuring Responsible Development of Digital Assets (see link below), there's some potential for cryptocurrency to be fully adopted and legitimized. But being a part of the traditional economy requires some level of control and you can't fully control crypto. So the evolution of that EO and other legislative actions will continue to mature and evolve over the next few years. And I'm sure there will be a bunch of nonsense proposals, like the EU’s attempted ban on proof of work (PoW), that might come up from people who have other economic incentives and want to slow the progress.

Managing Partner & CISO in Software, 11 - 50 employees
This is something that we will have to figure out for our regulators in general because 40 years ago, the people who came into power as representatives in Congress and the Senate could adapt to the speed of business, economics and change. Today you still have people questioning Mark Zuckerberg on how Facebook makes money. In 10 years, the senators who've been there for 30 to 40 years are going to be so out of their depth because this is a completely different ballgame. That's going to be the biggest challenge to having meaningful policy change. Otherwise, technology will be technology 40 years ahead of legislation.
3 Replies
Board Member, Advisor, Executive Coach in Software, Self-employed

If you go back to 40 years ago, the definition of the money supply in the United States was different from what it is today. With these cryptocurrencies, the economic definition of the money supply is completely different. How does the federal government moderate inflation and the economy in a digital currency world? That is a critical issue we need to think through that we're not even talking about. But that act probably has a bigger macroeconomic implication, both positive as well as negative, if we don't understand this and don't think about how to do that appropriately. It's not like you can play with the federal exchange rate when you're in cryptocurrencies at this point. All those international banking things, like LIBOR (London inter-bank offered rate), have been around for a long time and have also evolved, but they're anchored in the world of physical currency.

Managing Partner & CISO in Software, 11 - 50 employees

That’s also interesting because one aspect of Bitcoin and other cryptocurrencies was to make it so that centralized banks can't manipulate currency and do this. Now we're wondering how we can make it so that we can manipulate cryptocurrencies ourselves to support the ecosystem that we have now.

Board Member, Advisor, Executive Coach in Software, Self-employed

You always did a level of economic warfare at times, so how do digital currencies enable more of that or potentially reduce the implications of it? A central bank in the United States, or some other large economy, doesn't have the ability to have that type of worldwide monetary impact because it's all digital.

Data Scientist in Consumer Goods, 1,001 - 5,000 employees
The price of cryptocurrency just fluctuate too much. There are new tools that most companies are not used to as well, making transactions much harder.
Managing Director in Manufacturing, 51 - 200 employees
Proponents of crypto need to better align the advantages of it to real business needs. All to common we see and hear it just being tossed at all problems. This undermines the validity of the technology. 
CIO in Healthcare and Biotech, 201 - 500 employees
Traditional economies rely on the perception that there is stability and control that limits the risks of financial impact. Cryptocurrencies rely on the fact that it is not controlled and is a global currency. The only way I can see if it becomes more broadly utilised if there is a bridge in that gap. It might be some control on crypto through an authenticated banking system but still globalised but then also a relaxing of some regulation of current markets. Only time will tell.
CIO in Software, 51 - 200 employees
Biggest issue is transparency from both sides. Newspaper are ajar with cryptocurrency hack and it is seen as black economy for those who want to invest. For the providers - it looks like a money laundering scheme and particularly the users. Legal framework is shoddy. However the benefits are immense and in next couple of years it will be mainstream
Chief Technology Officer in Finance (non-banking), 11 - 50 employees
I've used crypto few times for purchasing and some thoughts on ths.

1. Time to transact - it's not predictable, can be seconds, can be 10 minutes. so I can't use it for a point of sale. On-line it works.

2. The crypto ecosystem is not big enough to hold crypto for working capital - I have to convert it to fiat to be able to purchase most things.

3. The value is variable - see above - I need to be able to convert to fiat quickly to ensure margins

4. It's complex to manage a wallet for the average person

5. Banks could provide wallets to their customers but are choosing to stay on the sideline. Their business is money and they not touching this type of money. If they owned the wallets, they could clip every transaction, but no.

6. Governments are not fans as transactions occur outside their visibility.

7. Yet to have a killer application - all the above would be overcome if there was a large enough incentive for people to overcome the above. For example, if Apple said they would only accept crypto for new iPhones, then adoption would most likely explode. 
IT Director in Services (non-Government), 11 - 50 employees
The main hurdle to make cryptocurrency part of traditional economies is that out of control from government side and they couldn't gain any profit from this kind of currency and couldn't know the original source of this trading came from.
Solutions Architect in Software, 51 - 200 employees
From my perspective, there needs to be more adoption of “virtual money” in day to day interactions. In South Africa, there are a few online merchants who accept Crypto, but that is as far as it gets. There will come a time when the tipping point arrives, but until then, it will be the currency for the insiders.
AVP and Deputy CIO in Education, 10,001+ employees
More than a few issues... stability of the value of crypto (even "stable coins" have risk), high transactional costs (gas and network fees), transaction speeds (it takes minutes to hours to complete a transaction), and security (we've seen billions in crypto stolen).

Of these, I think transactional costs have the greatest barrier to widespread adoption.

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