Adoption of Cryptocurrency

In order to increase the adoption of cryptocurrency, there has to be an increase in demand of cryptocurrency. Since most cryptocurrencies have only a fixed total supply, and yet demand for the coins is uncertain and constantly fluctuating.

There should be a stability in cryptocurrency to be trusted as an exchange, if prices keep on rising and falling, people will try to get away from cryptocurrency.

Use of cryptocurrency has grown substantially since Satoshi Nakamoto published the Bitcoin White Paper and as of April 7, 2015, the total market capitalisation of Bitcoin was judged to be about US$3.5 billion. Bitcoin has experienced a very high degree of volatility since its inception (its market capitalisation plunged by more than 50 per cent in 2014), but usage is on the increase with the number of Bitcoins in circulation rising to about 14 million in April 2015 and daily Bitcoin transactions surpassing 100,000 for the first time in the last quarter of 2014.

There is also increasing acceptance of the technology by retailers. A number of major retailers have begun to accept cryptocurrency as payment, such as Dell, Microsoft and Expedia and a report by Boston Retail Partners found that about 8 percent of US retailers intend to start accepting Bitcoin as payment by the end of 2015.

There is also increasing venture capital investment in the cryptocurrency space with venture capital funding for Bitcoin businesses tripling to US$315 million in 2014. Financial institutions are also paying increasing attention to the technology with the New York Stock Exchange and BBVA participating in a US$75 million funding round in Coinbase (a Bitcoin wallet and exchange service) and the licensing of Nasdaq’s X-stream technology to Noble Markets (a platform for trading Bitcoins). In April 2015, UBS announced that it intends to open a London-based research lab to explore the application of blockchain technology in the financial services industry.

It appears that cryptocurrency adoption is most advanced in North America and Europe, but an increasing number of activity (and users) can be observed in other regions as well, with activity growing relatively quickly in some emerging countries in Asia, Latin America, and Africa and the Middle East.

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