Factors influencing the adoption of cryptocurrency
- Costs:Cryptocurrencies offer the potential of sending money at very low costs. Bitcoin for example, transaction costs are 0.0001 BTC which is $0,05 USD at an exchange rate of 500 USD/BTC.
- Transaction speed: The actual transaction spreading through the network takes only seconds. The maximum time a bitcoin transaction takes to be safely accepted is an hour at maximum.
- Decentralized: There is no third party responsible for issuing the currency, therefore no additional trust is included.
Cryptocurrencies are not backed by the government
- Price stability: For example Bitcoin, the value of the currency has endured enormous fluctuations. The volatility is very high compared to other currencies and gold.
- Security: Cryptocurrencies are designed to be used in a decentralized fashion using cryptographic proof instead of relying on trust.
- Privacy: Cryptocurrency is known to be anonymous. While it might not be visible in the blockchain, all the transactions that happen on the network are visible for everyone in the network. Therefore it is impossible to make transactions invisibly.
Countries Adopting cryptocurrency:
The Venezuelan economy is being crippled with hyperinflation, driving the value of the bolivar down to all time lows, which is destroying the wealth of the country and the government is imposing strict capital controls leaving the citizens as shareholders of worthless currency. Some people in Venezuela have been looking towards bitcoin as an alternative store of value.
The indian government have banned the 500 and 1000 note rupees in order to take down the corruption. This country is a cash based society, and these notes are accounted for 85% of the cash in circulation.
Since people are keeping their savings in cash and declaring these notes worthless meant that they had to deposit them into a bank account. After this, people demanded gold where its price skyrocketed as high as $2294 an ounce, and the government banned all gold imports.
Eventually, the bitcoin adoption has increased where the price has gone to $ 1000 USD with 200,000 users.
In Japan, cryptocurrency is legally recognized as a currency which makes it easier for financial institutions to invest in Bitcoin and crypto related businesses.
Utility bills can be paid in Bitcoins.