Mass adoption will happen as investments are made in companies trying to solve infrastructure and access issues in today’s ecosystem, says Rebecca Mitchem, partner at Neotribe Ventures.
When will cryptocurrencies become mainstream? Many would say that cryptocurrencies are already mainstream – it’s talked about constantly in the media and often at work and at social events.
However, the truth is that only 16% of American adults have personally invested or traded in cryptocurrencies. For comparison, an estimated 56% of American adults own stocks. Although there will always be a percentage of the population that considers cryptocurrencies too risky, there is still a long way to go before cryptocurrencies have the same penetration as stocks.
Cryptocurrencies will become mainstream when investors view all aspects of trading and holding cryptocurrencies as safe, accurate, and continuously operational, with no errors in settlement or account balances. And, of course, when people stop hearing stories of crypto holders forgetting passwords and losing tons of money or crypto being used primarily for nefarious reasons.
If cryptocurrency supporters can alleviate these concerns, opening and trading a crypto account could be as easy as opening an E*Trade or WealthFront account.
So when will this happen? This will happen as investments are made in companies trying to solve these infrastructure and access issues in the current ecosystem. Although we often hear about investing in new currencies, NFTs, etc., we don’t often hear about the companies that work to ensure that blockchains work seamlessly.
For significant crypto penetration to occur, it is essential that we invest in ensuring that consumers have confidence in the functionality of the entire transaction process. This includes the security and accuracy of account balances.
Fortunately, a number of very smart people are already tackling these problems. Take the example of Metrika. Metrika works to make blockchains reliable by managing and predicting technical issues in their networks. Using their technology, blockchains can predict potential issues that could disrupt their operations.
While a blockchain works directly with Metrika, the consumer benefits the most. Metrika’s technology reduces latency and improves the performance of a blockchain. It also helps solve problems faster with tools that enable collaboration across the blockchain ecosystem. By ensuring the continued smooth operation of blockchain operations, consumers can build trust. Let’s be honest – no one loses trust faster than watching a transaction take several seconds to be confirmed.
Chain analysis is another interesting example. Their mission is similar to Metrika but attacks it from a different perspective. Their software is capable of linking entities (e.g. companies, governments, individuals) to crypto transactions. This link allows the transacting party to investigate with whom they are actually transacting and the potential source of funds. In essence, Chainalysis helps weed out transactions with malicious actors and make crypto transactions as safe and compliant as everyday transactions with your current financial institution. Although consumers will not currently interact directly with companies such as Chainalysis, consumers can feel more confident in their transactions as these companies work to prevent malicious or malicious actors from transferring funds through cryptocurrencies.
Finally, let’s look at Coincover. Coincover aims to protect crypto from hackers or human error and can be used by individuals or businesses.
They have three main pillars:
2) compensate, and
With their technology, crypto holders can feel protected as Coincover aims to prevent suspicious transactions from occurring. In fact, they will compensate you if your account is hacked and recover your private keys if necessary.
Essentially, this eliminates consumer fears of malicious attacks as well as the fear of losing access to your account and therefore your account balances.
Until there is full trust in blockchains and crypto accounts (which will probably never happen as we see fraudulent transactions even with bank accounts today), consumers can use offerings such as those from Coincover to ensure their crypto balances are safe and effectively insured.
Mass adoption is coming
As we all see day to day, the industry is striving to increase the wider adoption of crypto. By doing so, consumers are more aware of the potential benefits of crypto, but they are also exposed to the potential risks. It’s important that companies like Metrika, Chainalysis, Coincover, and many others continue to address ecosystem issues, both real and perceived, in order to make crypto more mainstream.
About the Author
Rebecca Mitchem is a partner at Neotribe Ventures, a Silicon Valley company that invests in early-stage and growth-stage companies developing breakthrough technologies that spark the imagination. She co-manages Ignite, a $90 million fund focused on growth-stage companies across industries including computational biology, enterprise security, blockchain technologies, cleantech, and more.
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