Digital currencies are supposed to be the future of money as we know it, but they have fallen way short of becoming widely used fiat. As of mid-2017, alt-coins and cryptocurrencies such as Bitcoin remain on the fringe of the global economy; some analysts are concerned that the digital currencies are developing in ways that are not conducive to their widespread adoption; in fact, their intricate relation with technology could make them a passing trend in the worst case scenario.
One of the problem with digital currencies is that the leading protocol is dragging the rest of them down to a great extent. The controversial Bitcoin has managed to capture numerous headlines over the last few years, and quite a few of them have been less than positive.
There are three major issues that are present obstacles to the mass adoption of digital currencies:
1 – Bitcoin Stability
In 2017, Bitcoin topped the list of the most unstable currencies in the world along with the bolivar in Venezuela, the lira in Turkey and the pound sterling in the United Kingdom. Bitcoin stability has been a nagging problem due to speculation and lack of oversight. As a decentralized currency, Bitcoin has fluctuated from a value of less than $460 in May 2016 to more than $1,800 a year later. Clearly, this volatility presents an obstacle for people who are worried about factors such as inflation. Lack of Bitcoin stability and the specter of criminal organizations using the digital currency for money laundering will always get in the way of mass adoption.
2 – Competing Alt-Coins
The open source technology that makes Bitcoin possible has prompted various developers to organize their own digital currencies. The blockchain platform also serves as the basis for alt-coins such as OneCoin, an effort to develop a cryptocurrency that features a centralized method of oversight along with a series of policies such as Know Your Customer, a banking standard to prevent the use of digital currencies for nefarious purposes. In theory, this competition between electronic currencies should be good from a capitalistic point of view, but it has proven confusing for consumers.
3 – Bitcoin ATMs
Just as the value of Bitcoin was skyrocketing in May 2017, news of a scam perpetrated in Maryland dampened the enthusiasm behind the spread of Bitcoin ATMs. According to a news report by a television station in Baltimore, a man lost more than $4,000 in what he thought was going to be a purchase of a 1955 Chevrolet Bel Air. The car was advertised online and the seller directed the man to transfer to complete the purchase at a Bitcoin ATM located inside a local Wal-Mart. The scam also involved the fraudulent use of a Google Wallet logo.