When will cryptocurrencies gain widespread adoption?
According to a study conducted by researchers at the Imperial College London, cryptocurrencies possess the potential of becoming a widely used form of payment within the coming decade.
In their research report titled “Cryptocurrencies: Overcoming Barriers to Trust and Adoption” Imperial College London’s Professor William Knottenbelt and Imperial College Business School’s Dr. Zeynup Gurguc, argued that so far cryptocurrencies are already acting as a store of value just like fiat currencies.
Scalability and Design Improvements Needed
However, cryptocurrencies are yet to effectively serve as units of account or mediums of exchange. In order to satisfy the last two functions just like fiat currencies currently do, Bitcoin, as well as other cryptocurrencies, will be required to improve in various areas including design and scalability. At the moment, for instance, a big number of cryptocurrencies are built on blockchains which are not designed to handle high transaction volumes.
Additionally, cryptocurrencies will also have to adopt more user-friendly designs to make them usable by those who do not possess specialist knowledge of them. Price movements of cryptocurrencies will also have to stabilize and become less volatile if they are to be widely adopted. Having a standardized regulatory approach across the globe will also assist substantially.
With these improvements according to Knottenbelt and Gurguc, it will be possible for cryptocurrencies to herald a new technological dawn with regards to how money is spent.
The researchers from Imperial College, also noted that every time money evolved, say from cowrie shells and other objects of value to coins and notes, there has been a reduction in payments friction. Per the researchers, cryptocurrencies could serve to reduce payments friction in the global economy.
“The world of cryptocurrency is evolving as rapidly as the considerable collection of confusing terminology that accompanies it. These decentralised technologies have the potential to upend everything we thought we knew about the nature of financial systems and financial assets,” wrote Prof. Knottenbelt.
Blockchain and Cryptocurrency Initiatives
Imperial College, which boasts of 14 Nobel Prize winners, has had a research center known as Center for Cryptocurrency Research and Engineering focusing on blockchain initiatives since September 2015. Knottenbelt has been serving as the director of the center since its inception.
Early last year digital assets software platform, Blockchain, partnered with Imperial College to unveil the Digital Asset Research Lab. The goal of the lab is to explore blockchain technology’s transformative potential.