Why aren't cryptocurrencies successful as a medium of payment

[jatoman]

Cryptocurrency is volatile. The price is not stable yet..imagine someone buys a good worth $1000 from your site and you wake up to discover it has dropped to $900

No doubt that price volatility is an obstacle.

Cryptocurrency exchange rates presently are driven primarily by speculation.  The result is the sometime large change in price that we often call "high volatility".

Currency exchange rates are volatile.  Cryptocurrency is no exception. 

As speculation is driven out of the cryptocurrency market, cryptocurrency exchange rates will mimic fiat currency exchange rates.

[Gaggy185]

At first you should know that cryptocurrency is not legalized in any country yet so it's the main reason why cryptocurrency can't be used as a payment method. If there is any company/shop/store/restaurant accept cryptocurrency for payment so it'll be kind of tax evade. Beside cryptocurrency has banned in some countries so cryptocurrency can't be a global payment method at the moment

[marks1976]

I think it's only the matter of time. Ordinary shops don't have the equipment and often they even still don't care, because it'll be expensive to do so and not so many people would want to pay with cryptocurrency.

Actually accepting cryptocurrency by using payment gateway specialised for this barely take any amount from your wallet, instead, you will have a wider users coverage for free.
But what makes people not accepting bitcoin yet is that they are afraid of it mainly because they are uneducated about cryptocurrency and people don't know how to implement it to their business.

[eliek18]

the first thing that becomes a problem is the public understanding of crypto is very little and there are still many misunderstandings about crypto. the government is also not fully supportive and the banking or other financial companies are also very opposed to crypto and they think that crypto could harm and take over their business.

[goldcoinminer]

the first thing that becomes a problem is the public understanding of crypto is very little and there are still many misunderstandings about crypto. the government is also not fully supportive and the banking or other financial companies are also very opposed to crypto and they think that crypto could harm and take over their business.

Yes.I believe why cryptocurrencies are not yet successfull as a medium of payments its because people lack the proper education and awareness of crypto potentials and benefits.And the fact that a lot of negative news are against cryptos,it will add more confusion and even fear to the people if they use it.Lastly,cryptos are not yet supported by the government just like in my own country.

[jatoman]

At first you should know that cryptocurrency is not legalized in any country yet so it's the main reason why cryptocurrency can't be used as a payment method. If there is any company/shop/store/restaurant accept cryptocurrency for payment so it'll be kind of tax evade. Beside cryptocurrency has banned in some countries so cryptocurrency can't be a global payment method at the moment

It's legal in the United States of America to name just one country.

Very few countries have banned all cryptocurrencies for payment.  

I believe so few countries have banned crypto payments mostly because it's not used widely (thus my creating this thread!).  It's not enough of a threat to worry about.

Now, I agree with you that, when crypto payments experience greater adoption, governments may ban certain cryptocurrencies for the reason you highlight... tax evasion.  This is one of a series of regulations governments are concerned crypt payments evade.

That is why I think before a cryptocurrency will see widespread use is it needs to be "regulator friendly".  I'm not aware any cryptocurrency that is "regulator friendly" because all cryptocurrencies hide the identity of the buyer & seller along with detail about what was purchased, where it was purchased, what, if any, taxes were paid, and so forth.

[matanglawin]

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?

It is not yet accepted by many countries as an official currency maybe because of the market volatility. The market value of mist cryptos are lacking consistency which is a must when it comes on cryptos to have equality in the world market. It is indeed profitable but maybe, there'll be more years to come before cryptos to be official in most of the countries.

[jatoman]

IMO, these prevents mass adoption:
1. Ease of use (not many people are technical to understand priv keys, addresses, mining, etc)
2. Security (in terms of preventing one's self to be scammed, goes back to item 1)
3. Media is still propagating bad image about crypto, we can understand that they are controlled by the banks anyhow.
4. Acceptance of merchants for daily use.

I agree.

What items #1, #2, and #3 have in common is the need for compelling applications that make it fast, easy, and safe for buyers to use and sellers to accept cryptocurrency payments.  The applications I have seen are just too cumbersome of a user experience for most people to use.

[jatoman]

Popularity, regulations, and common used. I think every new technology takes times until it was widely used by the people, new technology need to adapt first and people are feel safe when using it and the more it still tiny, the more chance for us to hold as many cryptocurrencies until it was expensive.

Yes, all technology goes through the Diffusion of Innovations (https://en.wikipedia.org/wiki/Diffusion_of_innovations).  Cryptocurrency is no exception.

We are in the "Early Adopter" phase, which are cryptocurrency visionaries and enthusiast such as we at bitcointalk.org.

Geoffrey Moore in his book, Crossing the Chasm,  suggests that transitioning from the Early Adopter phase to the Early Majority requires special messaging.  His point is success has less to do with the technology (even though this does need to be truly disruptive) and more to with communication and education to reach the Early Majority.

This is why I believe there needs to be a significant marketing and education campaign making people aware of cryptocurrency, what are its advantages over traditional mediums of payment, how it works, and why they should trust it. 

[michellee]

I think it's because not all country is accepted cryptocurrencies for a payment system and besides that, the price of cryptocurrencies still too volatile which is not good to be used as a payment. people cannot accept if the price is always changing in any second and if they want to use cryptocurrencies as a payment when they buy something, the price of that product will always change and they need to spend more amount of coin when the price increase. and we know that the price of the product will always increase in the future, so they will need to spend more.

[jatoman]

I think it's because not all country is accepted cryptocurrencies for a payment system and besides that, the price of cryptocurrencies still too volatile which is not good to be used as a payment. people cannot accept if the price is always changing in any second and if they want to use cryptocurrencies as a payment when they buy something, the price of that product will always change and they need to spend more amount of coin when the price increase. and we know that the price of the product will always increase in the future, so they will need to spend more.

Yes, extreme price volatility where the value of routinely drops or rises significantly in less than 24 hours can be an obstacle to wide spread use.  

While in the past year, especially between November and February, there has been instances of extremely price volatility, in the past 90 days price of cryptocurrencies such as bitcoin have been stabilizing.  In the past several weeks the price has changed less than 5%, which is similar to the change in value of fiat currencies such as the USD.  

For example, on 13th of June bitcoin was 6299.52 USD.  At the time of this post it is 6337.85 USD.  That's less than 1% change in price over a 2 week period.

During the same period the US Dollar Price Index went from 93.82 to 94.58.  This also was less than a 1% change.

So, during the past couple weeks the price volatility of bitcoin was actually less than the US dollar.

Speculation was the driver for extreme price volatility of cryptocurrencies in November through January.  As speculation was driven out of the market, prices stabilized.  Over the next year I expect price volatility of cryptocurrency to be similar to price volatility of fiat currency.

This is why I don't believe price volatility will be a significant obstacle to wide spread use over the next few years.  Instead, I see other obstacles posters on this thread have highlighted being more significant.

[dasha_buka]

Because we all people have been brainwashed to believe it's all the lies  the corporations have been feeding us for so long, 2017 was the year when people learn about btc completely               

[code]

Because it's been too little time. There should be infrastructure for this. And then the law of network effect will come into force. It remains to wait very long...Waiting, watching...

[jatoman]

I think you are thinking pessimistic about the future of the cryptocurrency market. For the next 10 years, cryptos will become famous and become the global currency of the entire world. At that time, cryptocurrency will replace real money to become the most popular currency in the world.

Fame is not the problem of cryptocurrency any more. I believe it has gone viral to help acceptability but the use is still limited and people's confidence is declining. If bitcoin can't serve as payment why can't other. Crypto has some innovation in online shopping with payment medium but still struggle to thrive. I wish improvement comes in the nearest future

I agree that most people have heard of bitcoin.  I asked virtually everyone I know whether they have heard of bitcoin.  100% said yes.

However, when I ask people who have heard of bitcoin whether they know what cryptocurrency is, all but one person said no.

So, while people of heard of bitcoin, too fee understand what cryptocurrency is, how it works, why they should trust it, and, most importantly, what about it makes it superior to traditional payments so they will want to use it as a medium of payment.

It's going to take a significant campaign to get enough people aware of it and wanting to use it.

[MiniMountain]

One thing for sure is because of it's decentralization that only a few companies accepting crypto, also government still lack of regulation related on cryptocurrency that's why it not accepted yet as medium payment but it will be after a few years because crypto is on mainstream.

[jatoman]

One thing for sure is because of it's decentralization that only a few companies accepting crypto, also government still lack of regulation related on cryptocurrency that's why it not accepted yet as medium payment but it will be after a few years because crypto is on mainstream.

Governments won't enthusiastically support cryptocurrency as a medium of payment until there is a cryptocurrency that is "regulator friendly".

They see cryptocurrency as a tool to evade regulations.  This is because all existing cryptocurrencies, a) hide the identity of the Buyer and Seller, and more importantly, b) hide the detail of the nature of the purchase.  Without this information regulators such as tax authorities or customs agencies can't do their jobs.

Their support for a cryptocurrency will come only when this cryptocurrency allows their regulators to their jobs.  "Regulator friendly" means there must be a way to learn the detail about the nature of the purchase.

[cryptoking33]

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?

A lot of obstacles are preventing cryptocurrency from becoming more successful some of them include the so much governmental regulations against it and the low public awareness of cryptocurrency. Many countries have refused to accept cryptocurrency as a medium of payment because of fear of losing control over their financial systems, all these have prevented the massive adoption of cryptocurrency globally.

[ekechie]

Crypto currencies are new and the industries is just started to develop and i believe given crypto currencies time, it will rank up and be used for many payment option, one good about crypto currencies is that it is acceptable everywhere.

[jatoman]

Basically, Bitcoin is an asset just like gold and bitcoin has unique feature as currency.

When people decide to use fiat, they require to having stable value unlike cryptocurrency still consider volatile until now so that's why most people can't use bitcoin as legal currency like fiat !

I agree that extreme price volatility such as what we saw between November 2017 and February 2018 is an obstacle.

However, the past several months cryptocurrency prices have been stabilizing because speculation has been driven out of the market.  Further, the last couple weeks bitcoin's price has been more stable than the US dollar.

So, cryptocurrency is approaching similar price stability as fiat currency.  That's why I don't believe it price volatility is that significant of an obstacle.  Instead, I see government support of cryptocurrency as a medium of payment and awareness being the two most significant obstacles.

[lieutkcb]

Popularity, regulations, and common used. I think every new technology takes times until it was widely used by the people, new technology need to adapt first and people are feel safe when using it and the more it still tiny, the more chance for us to hold as many cryptocurrencies until it was expensive.