Ten years after the launch of bitcoin in 2009, it has gone from being a little-known web experiment to a global phenomenon. The reason for its newfound fame that it started to gain in 2017 was its dramatic rise in value. One of the most popular embodiments of the madness of its valuation was the fact that two pizzas bought with bitcoin in 2010 would be worth around $40 million by 2017.
Covering not just bitcoin but the whole gamut of currencies, a 2017 study by Cambridge Centre For Alternative Finance collected data from over a hundred cryptocurrency companies in nearly 40 countries representing around three-quarters of the young industry.
Up until this point, there had been very little information about exactly how many people were using the new cryptocurrencies. The survey found that there were around 35 million cryptocurrency wallets that had been registered and that a little less than 10% of them were in regular use. The research also explored which currencies were the most commonly used, with bitcoin coming out on top with rivals like Ripple and Ethereum starting to catch up.
But since the great boom of bitcoin in 2017, it has obviously attracted a great deal more attention, not just for itself, but for cryptocurrencies in general. So a more recent estimate is that there are around 20 million users across the world – still a far cry from the estimated 1 billion Visa users and 640 million MasterCard users globally. So, impressive as the 20 million figure may be, there’s still quite a way to go before cryptocurrencies truly join the mainstream.
Let’s look at some of the industries which have embraced cryptocurrencies – and which are yet to join the party.
As a truly global industry, it’s not too surprising to see tourism up there as one of the biggest cheerleaders of cryptocurrency. After all, using cryptocurrency instead of conventional means of exchanging money between different countries can save huge amounts of cash – as there’s no bank or intermediary to pay.
This is why we’ve been seeing everyone from airline operators like AirBaltic and Surf Air to the Japanese discount flyer Peach embracing this new way of paying. Other exclusively online travel services like Expedia allows it as a payment method for hotel stays, and the Spanish travel agency Destinia welcomes it for car hire and air travel, too.
As pioneers in most fields, the space travel arm of the Virgin empire will save you a seat on their intergalactic vessel in exchange for the equivalent of £250,000 in bitcoin. If the mood takes you, you can even pick up a Tesla car using cryptocurrency to go electric on the road.
Moving on to property, this is a sector in which large sums need to change hands safely and securely. As cryptocurrency is underpinned by robust and pretty much unbreakable blockchain technology – which is less vulnerable to an attack as it doesn’t hold data on a single server – they are tailor-made for this requirement, too.
As such, a £192 million apartment development in Dubai – being marketed by UK business people Michelle Mone and Doug Barrowman – is taking deposits in a variety of cryptocurrencies. “I’ve been invested in cryptocurrency for some time, it’s not a new thing,” Mr. Barrowman said. “We’re offering the opportunity for people who’ve made significant gains to invest it in land.”
While agriculture might initially seem like an industry wedded to more traditional ways of working, it’s a key exponent of cryptocurrency. A fairly unique set of circumstances have led to its adoption of a system using the Mobi currency as a method of payment between the farmers and the processors of their foodstuffs.
In this case, it’s the ease with which payment can be made which also cuts out an intermediary in the process. With many farmers suffering from margins that are severely under pressure – this is providing a vital lifeline, especially to the smaller enterprises.
Gambling was one of the early pioneers of cryptocurrency. Poker website Satoshi Dice made cryptocurrency payments available when it launched in 2012 under the banner of ‘blockchain-based betting’. However, many online operators have been slow to follow suit – if they’ve even chosen to follow suit at all.
While a number of online casinos have added cryptocurrency to their payment options, an even greater number have not. As part of strict gambling regulations, online operators in the UK must be able to identify every customer – and verify their sources of funds. As many cryptocurrency users are able to trade anonymously, and conceal their sources of wealth, this is at odds with regulations. That’s why you won’t see many gambling websites allowing cryptocurrency as a payment option.
What’s more, it might be completely inappropriate for their audience. For example, older gamblers might not be on board with cryptocurrency, which is seen as a young, more tech-savvy product. Your average bingo player might find cryptocurrency too complicated – so this is another reason why established online bingo operators choose not to embrace cryptocurrency.
What’s more, players might be put off by the cost of buying the wallets in which to safely store their crypto coins. In the case of the latter, the emergence of lower-cost options may help reassure them.
It’s worth considering that there was a time when a credit card was seen as an exotic form of payment only available to some, and even contactless payment is a relatively novel concept.
So it would be rash to state that cryptocurrencies will never catch on with the older consumer – but it would be equally difficult to try and predict when this might happen. Much has to do with the momentum currently behind the new form of payment – and the greater this becomes, the sooner this change should come.
The main benefit of cryptocurrencies is that they are not linked to any government or financial institution, so transactions are direct, quick and cost-effective. The second is the level of security that the blockchain system provides. It’s this security that has even started to encourage more and more third parties to get involved in facilitating bitcoin payments. This is especially relevant in parts of the world where credit card payments may be impractical due to infrastructure or remote location.
But despite these benefits, it’s generally agreed that for cryptocurrencies to really be an acceptable alternative to traditional fiat currencies a number of other hurdles need to be overcome – particularly among the older generation.
For many, the idea of any kind of a cryptocurrency is simply too abstract to grasp. Yes, you can get physical bitcoins but generally, the currencies exist in digital form only, so it can be problematic to encourage people to use a currency they can’t physically see. Admittedly, it’s a world that is rapidly moving towards a cashless society but, nevertheless, it’s quite a big ask to expect people to start using a currency that can’t easily be converted to cash.
Then there’s the question of its legal status. Few governments have made their precise positions known – and indeed, many don’t have any position to speak of as yet. The same can be said of major financial institutions who are probably more interested in the possibilities of the blockchain technology that lies behind it. But the fact that some large sectors – tourism, property, and agriculture – have started to embrace it might just be the high-level buy-in that cryptocurrency needs to go mainstream.