To examine whether cryptocurrency will survive, we need to ask whether crypto offers enough value over traditional forms of currency to endure, and the answer to this is surely a resounding yes.
To take a recent example that illustrates this, consider Ripple, the blockchain startup whose product, xCurrent – designed to make the checking of information required for transactions easier – is already being used by a number of banks, such as Santander.
xRapid is a more recent product from the startup – one which relies on cryptocurrency to work. This product has its application in emerging markets, where pre-loaded local currency accounts are generally required for facilitating payments – pushing up transaction costs and time. Instead, xRapid will quickly convert (with a transaction time of four seconds) fiat money into a cryptocurrency, XRP, to move it through the system before converting back into whatever the required currency is at the end.
The attributes of crypto make it easier than other currencies to use for micropayments, large transfers and sending money overseas. However, it’s still not caught on with consumers. “Right now, cryptocurrencies are still too geeky – you have to know too much about how they work,” says Thomas Frey, senior futurist at the DaVinci Institute. “It’s the way computers worked in the 1980s, people would actually change out their own motherboards and put in new cards, people don’t do that anymore. Now, I think we’re moving into the era where we don’t need to know so much how cryptocurrencies work, just what they do.”
It’s widely agreed a breakthrough moment is needed where cryptocurrencies become vastly more appealing for the average internet user. It’s unclear how this shift might take effect – whether it will be through growing interest in decentralised, blockchain based companies or whether there will be a fundamental transformation in how secure or accessible cryptocurrency is.
Whether or not crypto catches on will also be dependent on the network effect: “Which is the more people that use it, the more people want to use it,” says Tsyvinski. “You can see it in variety of contexts and it’s certainly very strong with money. The more people who use the dollar, the more people want to denominate contracts or sales in the dollar.”
People are not precious, in the end it will all come down to convenience and ease of use. When choosing to transact in cryptocurrency becomes as simple as selecting Paypal over entering lengthy card details, or tapping a contactless card over using the chip and pin device – that’s when crypto will truly reach the masses.