Why aren't cryptocurrencies successful as a medium of payment

[jatoman]

Governments of different countries will always distrust the decentralized crypto currency. Very few states will maintain the uncontrolled crypto currency for it and give it the status of a means of payment. There will probably be few countries like Japan and Germany. In any case for now. However, depending on how the decentralized crypto currency will behave in the future, the number of such countries will increase or decrease. In any case, the process of legalization of the crypto currency will be long and controversial.

I agree that governments aren't going to support a cryptocurrency for a medium of payment until there is one that is "regulator friendly".  As you highlight, they won't support an "uncontrolled crypto currency" because this lack of control is "hostile" to regulators. 

Instead, there needs to be a cryptocurrency that allows regulators such as tax authorities and customs agencies to apply their regulations.  Better still, a cryptocurrency that actually makes applying regulations more efficient and effective than apply these regulations to traditional mediums of payment such as cash and card should certainly get governments to support such a cryptocurrency.

To my knowledge, no such cryptocurrency exists.

[lucy5632]

Crypto is still a new field and certainly still arising out the pros and cons of the existing therein. so from that Crypto can not be used as a medium of payment. Although some countries have already implemented this in some places, overall there are still many who are still reviewing this crypto.

[jatoman]

Crypto needs to be mass adopted before it becomes as a main medium of payment. Remember there are some countries that still do not have credit card payments. There are some places you can pay with crypto, it just needs to get bigger. Once there is more adoption, more companies will invest into crypto payments. Right now it doesn't seem like the best option for the average business to offer that service.

One of the revolutionary aspects of cryptocurrency is it is for everyone, including the over 2 billion people without access to banking services such as bank accounts or credit cards.

[jatoman]

Taking cryptocurrencies to pay for goods and services is risky for traders themselves because of the high volatility of crypto currencies. The rate of any cryptocurrency changes so quickly that it would have to change the whole time of the price or attach to the dollar, which depreciates the use of cryptocurrencies.

The price of bitcoin during the past month has been more stable than the US dollar.  So, I don't agree there is high price volatility.

There was high price volatility between November 2017 and February 2018.  Since early May the price hasn't been that volatile.

[holigans]

The global economy is nearly 80 trillion USD per year.  Payments using any type of cryptocurrency as a medium of payment is a tiny fraction of this total.

What are some of the reasons preventing cryptocurrency from being more successful as a medium of payment?

because cryptocurrency is just a digital currency that can not be in the hence of that many people who can not do sales and payment premises cryptocurrency if we want to make payment we must exchange it first to the rupiah and can only make payment

[michellee]

Taking cryptocurrencies to pay for goods and services is risky for traders themselves because of the high volatility of crypto currencies. The rate of any cryptocurrency changes so quickly that it would have to change the whole time of the price or attach to the dollar, which depreciates the use of cryptocurrencies.

The price of bitcoin during the past month has been more stable than the US dollar.  So, I don't agree there is high price volatility.

There was high price volatility between November 2017 and February 2018.  Since early May the price hasn't been that volatile.

bitcoin will still volatile in the future and I think it makes bitcoin cannot be used as the payment. the seller and the buyer don't like to see the price always changes from time to time and they still prefer with fiat for making a transaction. maybe there will be coins that can accommodate about the price so that coin can help cryptocurrency to be used as the payment.

[jatoman]

Taking cryptocurrencies to pay for goods and services is risky for traders themselves because of the high volatility of crypto currencies. The rate of any cryptocurrency changes so quickly that it would have to change the whole time of the price or attach to the dollar, which depreciates the use of cryptocurrencies.

The price of bitcoin during the past month has been more stable than the US dollar.  So, I don't agree there is high price volatility.

There was high price volatility between November 2017 and February 2018.  Since early May the price hasn't been that volatile.

bitcoin will still volatile in the future and I think it makes bitcoin cannot be used as the payment. the seller and the buyer don't like to see the price always changes from time to time and they still prefer with fiat for making a transaction. maybe there will be coins that can accommodate about the price so that coin can help cryptocurrency to be used as the payment.

Of course, none of us know how volatile bitcoin, or any cryptocurrency, may be in the future.  My observation is over the past few months the price has been stable.

Regardless of volatility, the most effective tactic to navigate the obstacle of price volatility is a cryptocurrency where the cycle time from when a buyer converts fiat currency into this cryptocurrency, then makes a purchase using this cryptocurrency, and finally, to when the seller converts this cryptocurrency back into fiat currency can happen within a few minutes, if the buyer and seller desire it.  The result is neither the buyer nor the seller are exposed to price volatility over such a short duration.

To my knowledge, no such cryptocurrency, or blockchain, exists that has such a short cycle time.

[jatoman]

The global economy is nearly 80 trillion USD per year.  Payments using any type of cryptocurrency as a medium of payment is a tiny fraction of this total.

What are some of the reasons preventing cryptocurrency from being more successful as a medium of payment?

because cryptocurrency is just a digital currency that can not be in the hence of that many people who can not do sales and payment premises cryptocurrency if we want to make payment we must exchange it first to the rupiah and can only make payment

For certain, sellers need the infrastructure to accept a cryptocurrency.  So, there needs to be a way to make it easy and very low cost (ideally, free) for sellers to add the ability for their point of sale or "POS" system to accept a cryptocurrency.

[BartS]

Taking cryptocurrencies to pay for goods and services is risky for traders themselves because of the high volatility of crypto currencies. The rate of any cryptocurrency changes so quickly that it would have to change the whole time of the price or attach to the dollar, which depreciates the use of cryptocurrencies.

That is a problem without a doubt, the volatile nature of cryptocurrencies can make it difficult for merchants to accept cryptocurrencies as a payment method, but as far as I can remember there are some services that allow you to convert your bitcoin immediately to fiat, that way you do not risk your profits in the market of cryptocurrencies, but those services come with a price and if the profits you get in your business are very small this could take an important part of your profits away from your pocket.

[jatoman]

Taking cryptocurrencies to pay for goods and services is risky for traders themselves because of the high volatility of crypto currencies. The rate of any cryptocurrency changes so quickly that it would have to change the whole time of the price or attach to the dollar, which depreciates the use of cryptocurrencies.

That is a problem without a doubt, the volatile nature of cryptocurrencies can make it difficult for merchants to accept cryptocurrencies as a payment method, but as far as I can remember there are some services that allow you to convert your bitcoin immediately to fiat, that way you do not risk your profits in the market of cryptocurrencies, but those services come with a price and if the profits you get in your business are very small this could take an important part of your profits away from your pocket.

I agree the most effective tactic to navigate the obstacle of price volatility is a cryptocurrency where the cycle time from when a buyer converts fiat currency into this cryptocurrency, then makes a purchase using this cryptocurrency, and finally, to when the seller converts this cryptocurrency back into fiat currency can happen within a few minutes, if the buyer and seller desire it.  The result is neither the buyer nor the seller are exposed to price volatility over such a short duration.

And, yes, for this to be practical there needs to no or very small transaction fees.

[Ritaaa]

Cryptocurrency can possibly be seen as a commodity, a form of digital gold (in the case cryptos like Ethereum, "digital oil"), stocks and shares in technology, and so on. But why would anyone want to use something as a currency that could potentially go up 2x, 10x, 20x in a few months?

Normal fiat currency like USD and EUR is relatively stable and lacks volatility, e.g. the price of a can of Coke hasn't changed much in 10 years.

Crypto is completely different. it's far more volatile and acts like stocks/shares or investments rather than national currencies

If I have holdings of fiat and holdings of shares - which should I use to buy a TV now? the fiat obviously

Why liquidize an investment that could be worth far more in the future over using fiat that will probably be worth approx the same?

[kabum21]

if you had a good bank account your money would be more in the future too. the thing is: you cannot save all money but you 'll need to spend some. of course, it would be financially beneficial to spend as few as possible.

The same applies to crypto, just that it is performing better than your bank account. as crypto is quite new, not yet really spendable and still risky, most people would not have all their money in a crypto account. but as the time goes by volatility will decrease and usability will increase. once is known how much bread you get for one token, the value will adapt to the economy only.

[jatoman]

Cryptocurrency can possibly be seen as a commodity, a form of digital gold (in the case cryptos like Ethereum, "digital oil"), stocks and shares in technology, and so on. But why would anyone want to use something as a currency that could potentially go up 2x, 10x, 20x in a few months?

Normal fiat currency like USD and EUR is relatively stable and lacks volatility, e.g. the price of a can of Coke hasn't changed much in 10 years.

Crypto is completely different. it's far more volatile and acts like stocks/shares or investments rather than national currencies

If I have holdings of fiat and holdings of shares - which should I use to buy a TV now? the fiat obviously

Why liquidize an investment that could be worth far more in the future over using fiat that will probably be worth approx the same?

For the past 10 years inflation has been exceptionally low in countries such as the US value of the fiat currency hasn't changed much in value.  On the hand, in countries such as Argentina with hyperinflation the value of fiat currency has changed dramatically.

And yes, some cryptocurrency are designed to be held as an investment.  After their ICO few rise or fall in value of over 100% in a few months.  For certain, bitcoin did between November 2017 and February 2018.  Since then, it has been stable.  The past month bitcoin has been more stable than the USD.

Lastly, people sell some their investments (stocks, bonds, commodities, precious metal, and so forth) all the time to get fiat currency to purchase goods and services including TVs.

What I think impacts the decision to use cryptocurrency for a medium of payment is what benefit does it provide buyers and sellers.  Consumers that don't have access to banking services such as bank accounts or credit/debit cards it provides a way to make electronic payments or remittances anywhere in the world.  For sellers it provides an electronic (not cash) payment with little to no transaction fees.

[Irvinn]

The global economy is nearly 80 trillion USD per year.  Payments using any type of cryptocurrency as a medium of payment is a tiny fraction of this total.

What are some of the reasons preventing cryptocurrency from being more successful as a medium of payment?

In order to use the crypto currency more as a means of payment, at least two conditions are necessary: legalization in most countries and the creation of an appropriate infrastructure for its real application. For the time being, the infrastructure for applying crypto currency is still not sufficiently developed and there are big problems with its legalization.

[ggod5]

I don't think it can't be a payment medium, but someone is preventing it from becoming a payment medium. I think at least it is now, but it will definitely not stop it in the future. It will definitely become a global payment medium if it is more convenient.
Why not use it?

[spritJ]

Because there are still many vulnerabilities in cryptocurrencies, it is not perfect, and many people still have many misunderstandings about encryption. The government does not fully support it, and banks or other financial companies are also very opposed to encryption, so it still has difficulties to overcome.

[jatoman]

The global economy is nearly 80 trillion USD per year.  Payments using any type of cryptocurrency as a medium of payment is a tiny fraction of this total.

What are some of the reasons preventing cryptocurrency from being more successful as a medium of payment?

In order to use the crypto currency more as a means of payment, at least two conditions are necessary: legalization in most countries and the creation of an appropriate infrastructure for its real application. For the time being, the infrastructure for applying crypto currency is still not sufficiently developed and there are big problems with its legalization.

Cryptocurrencies is legal as a medium of payment in most jurisdictions.   No jurisdiction enthusiastically supports any cryptocurrency because they see cryptocurrency as a tool to evade regulation.

[BruceJu]

The first problem is that he can't receive government regulation. The second problem is the popularity of cryptocurrency, which is very important for cryptocurrency instead of cash. XRP is a good cryptocurrency.

[KOF97]

Because many countries are against it, not all countries support it. Maybe they still need time. In a few years, perhaps the government will default to cryptocurrency.

[jatoman]

The global economy is nearly 80 trillion USD per year.  Payments using any type of cryptocurrency as a medium of payment is a tiny fraction of this total.

What are some of the reasons preventing cryptocurrency from being more successful as a medium of payment?

The possible reason maybe is due to the market volatility. The market value of most cryptos are suddenly changing from time to time which serves as a risk that there'll be times that profit will be lost. Consistency on the market value of a currency is really important to have equality in the market which is not present to most of the cryptos given that they are naturally volatile.

No doubt that extreme price volatility such as BTCexperienced between November 2017 and February 2018 could be an obstacle.  However, since May 2018 BTC price has been similar to many fiat currencies.  For the past six weeks BTC has been more stable than the US dollar.

So, I don't believe price volatility is a significant obstacle preventing people from using a cryptocurrency for a medium of payment.