Whether you like it or not, cryptocurrencies have become extremely popular and used worldwide in the last couple of years. Last statistics show that around 106 million people around the world use cryptocurrencies (in America alone, 46 million Americans own a share of Bitcoin).
You might be thinking that this number isn’t big, considering that there are around 7 billion people in the world, but on second thought, you will realize that that’s not the case and that there are many aspects you need to take into consideration.
First of all, not everyone has the knowledge when it comes to crypto and most crypto holders are considered to be in the Gen Z category. Older people have a hard time believing cryptocurrencies will bring any good, but if you think about it, the same thing happened to credit cards when they first saw the light of the day back in the 50s.
Nowadays, credit cards are pretty mainstream and there isn’t a household that doesn’t own one. In fact, statistics show that over 87% of adults own a credit card. If you connect the dots, it’s safe to assume that the same cryptocurrencies will follow the same path as credit cards and become a part of our everyday life in the next five or ten years, right?
Well, we will see about that. A lot is going on at the moment in the world of cryptocurrencies and the one certain thing is that the next few years will surely determine the trend crypto will take in the years to come.
Based on everything that we said, the main topic of this article will be just that – when (and whether will) cryptocurrencies become widely acceptable? Is it something we can count on, or history won’t repeat itself and crypto will stay in our memory as one of the biggest scams of the 21st century? Let’s find out.
What are cryptocurrencies?
If you are reading this article and you think – “what are cryptocurrencies?”, then this section is for you. Even if you know what crypto is, it might be a good idea to freshen up your memory and remember what it is all about.
So, what are exactly cryptocurrencies? First of all, let’s say that there isn’t a definite answer to this question. There isn’t a definition that is accepted by everyone, but there are rather several definitions we find solid and often refer back to when we explain crypto to someone.
Simply put, cryptocurrency is a digital (or virtual) currency that is secured by something that is called cryptography. Now, cryptography is a topic of its own, and it can be pretty complex to explain if we go into detail. But, we will say that thanks to cryptography, cryptocurrencies are virtually impossible to counterfeit – which is why they are unique.
If you want to learn more about cryptography and what it exactly represents, we suggest that you watch this Crash Course video, as it explains cryptography in great detail.
Cryptocurrencies are decentralized, which means that they aren’t owned by anyone (as money that is practically owned by the government), and they are built on something called a blockchain. Now, as with cryptography, blockchain can be hard to explain to a regular Joe in just a few sentences, so if you want to learn more about this fantastic concept, we suggest that you check another article of ours, that tackles this subject in higher detail.
Essentially, blockchain represents a database that is distributed amongst millions of nodes on a computer network, and it is what makes cryptocurrencies decentralized.
The most famous cryptocurrency is surely Bitcoin. It’s the first cryptocurrency ever created, and it’s the one that is basically generating the most buzz. However, Bitcoin isn’t alone and there are many other currencies that are popular. Ethereum, Cardano, Solana, just to name a few, are highly appealing to investors and are just a few steps behind Bitcoin when it comes to popularity.
Right now, as of January 2022, there are over 9,000 different cryptocurrencies present on the market, a number that keeps growing every single day.
Since crypto is decentralized, there isn’t an authority that can impact the value of one coin (government for example). This makes crypto appealing to us, the people, since the value of a specific cryptocurrency can’t be influenced that easily, and therefore it makes crypto terrific for investing money. Take the Turkish lira for an example of a currency that is owned by the government – by the end of 2021, because of the inflation, the currency lost over 20% in value, which resulted in millions of people losing money.
Something like this can’t happen in crypto, but this doesn’t mean that cryptocurrencies are immune to external factors and swings in value. Many factors affect the value of a cryptocurrency, such as social media, the project behind it, and so on.
Okay, but what are cryptocurrencies used for? Do they have some sort of real-world use? Well, that is the sweet part. Let’s see what crypto is used for.
Are cryptocurrencies used as a form of payment?
In a nutshell, cryptocurrencies are used for some sort of payment. That payment can be for anything – buying a pizza, buying something from a clothes store, or paying for a service. Now, it’s important to understand that not every cryptocurrency can be used for payment.
Sure, Bitcoin, Ethereum, and other more popular currencies can be used for paying for various goods, but not all cryptocurrencies (over 9,000 of them) can be used for the same thing. Many coins are considered to be “meme” coins and have virtually no value.
Bitcoin, for example, as the most popular cryptocurrency, apart from being used to buy other crypto and as a first coin crypto investors place their money in, can be used for purchasing cars, expensive watches, jewelry, and other tech products. We will be first to admit, the list of companies that accept payments in Bitcoin is still extremely small, but it’s not zero.
Ethereum on the other hand, is used to pay for gas fees when you purchase/trade coins on the Ethereum blockchain. Since it’s one of the most popular types of blockchains on the market, we’re talking about millions of dollars that go on gas fees from tens of millions of trades every single day.
Although it’s not exactly legal, there is a market that accepts cryptocurrencies for various products/services that you want to buy. We won’t share sites for such activities, but it’s important to mention that a lot is going on backstage that you don’t really see.
Since we want to focus on the legal stuff in this article, and what you can use cryptocurrencies legally for, it’s obvious that there is a long way to go before crypto becomes widely acceptable. Many companies such as Tesla state that they will start accepting Bitcoin as a form of payment, but have yet to prove that what they are saying is true.
When will crypto become widely acceptable?
The million-dollar question. When exactly will crypto become widely acceptable? When will you be able to use crypto on your credit card to buy groceries from your supermarket, pay for gas, or a cup of coffee?
When will you be able to accept your wage in crypto, or to buy cryptocurrencies on your local exchange? When will banks start to accept crypto and give you the possibility to invest in whatever you want in crypto?
Truth to be told, we don’t have an answer to all of these questions. There is still a long way to go before cryptocurrencies become widely acceptable, and there is a good reason why.
First and foremost, every country (or the government of every country) doesn’t like to be not in control. They like to have everything under their fingertips, and they can’t do that with crypto. Since it’s decentralized, they can control the input/output of the cryptocurrencies flow nor they can influence the price of it, which makes it extremely unfavorable to them.
This is the first problem when it comes to crypto acceptance, but there might be a light at the end of the tunnel. In late 2021, El Salvador was the first country in the world that officially accepted Bitcoin as a form of payment on their territory. This was groundbreaking news since it’s the first country that dared to say what everyone else has been thinking – there is value in cryptocurrencies, and crypto can be used as a form of payment.
Other institutions, companies also need to follow their steps. In January 2022, Tesla started to allow people to buy Tesla-related merchandise with Dogecoin, a meme cryptocurrency that everyone made fun of in 2021.
Even though it’s just a meme coin, this was a fantastic move by Tesla towards greater cryptocurrency acceptance, as now people could officially use a specific coin for their purchases.
There are other initiatives by companies as well – Microsoft lets people buy different services they provide with Bitcoin, such as Xbox Live and Skype. The famous Hong-Kong based hotel and resort chain Pavilion started accepting crypto payments for their customers. In November 2021, Mastercard stated that from now on, they will let their partners accept payments in crypto and buy specific services/products.
Many professional athletes also started to receive their contracts in crypto as well. In 2020, Russell Okung, the famous NFL player became the first Nation Football Player to collect a portion of his pay in cryptocurrency. In his contract, it is stated that he will receive 50% of his annual $13 million salary in Bitcoin.
Cases like this make the worldwide acceptance of Bitcoin much greater and can influence other companies/individuals to do the same. Only by doing so, crypto will become widely accepted and used by millions in their everyday lives.
Sooner or later
If the ongoing trend continues, we think that sooner or later, cryptocurrencies will become the new credit cards, and there won’t be a household that doesn’t own some sort of crypto.
But, there is still a long way to go before this happens. After all, good things take time, and when it comes to cryptocurrencies, we believe that time is the key. You can start from yourself! Investing in cryptocurrencies is a great thing to do if you believe in the whole thing and who knows, your investment might turn out to be a big hit!