technology

Episode 15

These talented and high energy entrepreneurs are set to disrupt the crowdfunding space.

How Long Until Cryptocurrencies are Widely Adopted?

How long until cryptocurrencies are widely adopted?

‘It’ll never catch on’, ‘We’ve always done it this way’, and ‘I don’t see the point’. We’ve all heard naysayers, objectors and laggards try to reject change, but fortunately for the rest of us, change is inevitable.

Have you ever heard of, or seen the Innovation Adoption Lifecycle? It’s mostly applied in the tech world, for new gadgets and apps, but it’s equally applicable to cryptocurrencies. See the graph below, and rather than try to place yourself along this graph, try and make an educated guess as to where cryptocurrency has reached in wide society. It’s hard, right?

INNOVATION ADOPTION CYCLE

 

Trust

For cryptocurrencies to be widely adopted and accepted, they must first be trusted. How do they build trust? Well, positive experience and word of mouth is one way, but really the trust and adoption will almost correlate exactly. As more outlets become available for engaging different currencies, more people will start using them, and vice versa, as more people start using the currencies, more outlets will appear.

Wide adoption will come when everybody is using cryptocurrencies, but with objectors in the ranks, the only way to achieve this is to apply a system in which people don’t even realise they are using them. Then, we may face the issue in which people lose trust, because they feel that they are involuntarily using cryptocurrencies because of ‘the system’.

Much like any system, perfect trust and terms of use may never exist, though, if cryptocurrency can position itself right, it may win ultimate trust by virtue of doing a better job of banking than… banks. As an additional bonus, if a cryptocurrency fails, it’s not taxpayers’ money that will bail it out.

Avoiding central governments is a good thing because of currency manipulation

Central governments have been trading on the foreign exchange market for a long time, buying and selling their own currency in order to achieve a number of goals, such as controlling inflation, being competitive against rival currencies and achieving financial stability.

We don’t know about you, but generally, nobody likes to play a game where the house always wins. Since cryptocurrencies are decentralised, it’s a fair game across the board, with no governments interfering with values and movements.

Central governments also like to do something called ‘quantitative easing’, in which they print more money and inject it into the economy when it’s being sluggish, to act as a stimulant. It doesn’t always work, as it initially pushes down the price of the dollar.

With cryptocurrencies, miners are able to help process transactions in order to earn pieces of the currency, and this is how the circulating supply increases. The owners or designers of the currencies cannot simply invent new coins to throw into the marketplace, as this would be fraudulent. Some cryptocurrencies are capped forever, without the potential for mining, such as Ripple, IOTA, NEO and EOS.

Historical currency changes

Let’s bypass cattle, crop, human, and resource trading and start with actual coins. Between the Mesopotamians and the Babylonians, both currency, and the concept of debt, property, compensation and business really became a necessity.

After more than 3,000 years of refining the process of metal coins, the Chinese Song Dynasty began using paper to assign values to currency in the 7th century on a local scale, before it becomes more widely adopted in the 11th century. By the 12th century, there was 26 million times more paper currency being printed than coins being produced each year.

It took until the 16th century in London for paper currency to become widely used, with various goldsmiths accepting gold in exchange for their paper values. The paper ‘promissory notes’ that were given out started to be exchanged themselves, rather than collecting the gold and trading that.

The system was flawed from day one, as the integrity of the goldsmiths, who became banks, and how well known they were, directly related to how likely a promissory note would be accepted. In 1694, more than 100 years later, the government took over and were granted the sole right to issue currency.

Much later, credit cards were introduced by American Express and the Bank of America in 1958, in California. It took a long time for credit and debit cards to really catch on, and even today, in the first world, it’s quite normal to find shops, cafes and restaurants who don’t accept this form of payment. Talk about laggards!

How long until the mainstream adoption of crypto?

There are three major indications that crypto is being widely adopted; the rise in value due to the rise in demand, the attempts of central governments to reduce the dependence on cash and increase the emphasis on credit and debit cards, and the emergence of new ways to apply cryptocurrencies.

In India in the summer of 2017, the government banned the 500 (£5.80) and 1,000 rupee notes overnight in an attempt to tackle cash hoarders. It was a spectacular failure, causing panic, unrest, and 99% of the newly illegal money ending up back in the banks anyway. For a country that mostly works on a cash basis, the people simply weren’t ready for this.

In 2015, the state of Louisiana tried to ban cash transactions between citizens, before it was deemed unconstitutional and thrown out. In the end, a law was passed banned the cash purchase of precious metals, like gold and silver. With some governments seeing cash as a threat, it’s only natural to see them pushing people towards a more digital system.

“Cryptocurrencies rise in value because they are being adopted, not because they rise in value”.

The rise in demand comes from various sources, such as the widespread popularity and discussion on social media, official government comments, airtime on news channels and the increasing accessibility of entry to the market (through platforms like Coinbase).

Our third reason that will affect how long widespread adoption takes, is how quickly big businesses start accepting cryptocurrencies. Microsoft and PayPal were early adopters of bitcoin payments (and donations), as were Dell, Steam, Save the Children, Wikipedia and Tesla.

Transaction fees make small transactions, like buying a cup of coffee, very inefficient with currencies like Bitcoin and Ethereum. Cryptocurrency IOTA, which does not exist on the blockchain, is one option for feeless transactions and could be a major player in encouraging widespread adoption.

Bitcoin ATMs

In the UK, there are almost 90 Bitcoin ATMs, which allow you to buy bitcoins physically with cash, input a bitcoin wallet address, and credit your account all in one transaction. Some of these machines allow you to sell your bitcoin and withdraw cash too. Whilst this concept is yet to blow up and take off massively, it is a great indication of what’s to come when Bitcoin is fully adopted.

Conclusion

Who better to conclude this piece than Andreas Antonopoulos, author or ‘Mastering Bitcoin’ and ‘The Internet of Money’. In October 2016, at a Bitcoin meetup in Germany, he said: “How long until mainstream adoption? Previous revolutions in money. In the mid-90s, you still couldn’t pay with a credit card in many places. I predict it will take 15-20 years for mainstream adoption of Bitcoin. We are in a race because governments around the world are trying to ban cash and force us to adopt a different sort of digital currency with complete surveillance, where they can flip and switch and you will no longer exist as a person if you doing anything they consider radical. Adoption patterns and the Gini coefficient. The ownership of Bitcoin is not as diverse as it should be, primarily because of the way it grew. But people who got in early and took the risk have been enormously rewarded; no one’s coming to bail out Bitcoin.”

What is Litecoin?

WHAT IS LITECOIN?

Lіtесоіn (LTC оr Ł [1]) is a рееr-tо-рееr сrурtосurrеnсу аnd open ѕоurсе software project released under MIT/X11 lісеnѕеѕ. Crеаtіоn аnd transfer оf соіnѕ іѕ bаѕеd on an ореn-source сrурtоgrарhіс рrоtосоl and іѕ nоt mаnаgеd bу аnу сеntrаl authority. Whіlе inspired bу, and in mоѕt regards technically almost іdеntісаl tо Bіtсоіn (BTC), Litecoin іѕ far quісkеr аnd cheaper.

At the time of writing this article (2nd Jan 2018), Litecoin sits at $254 per coin.

How much is Litecoin worth?

On December 18th 2017, Litecoin reached its all-time high, $360.93, which, when compared to the price one year before ($4.40), was an incredible 8200% rise. This is wholly reflective of a booming cryptocurrency marketplace, whose total market cap ballooned from $17.7bn to around $650bn in just one year, an increase of over 3,600%.

Where can Litecoin be used?

Litecoin is frequently compared to Bitcoin, which functions almost exactly the same, aside from the cost of transactions, which are around 1/50th of the size. For many cryptocurrency traders and users, Litecoin pricing acts more rationally than Bitcoin, and with a more sustainable future.

As we see some online stores begin to accept cryptocurrencies, we will see it possible to buy jewelry, groceries, clothes, electronics and more. Since the value of Litecoin is determined by demand on currency trading websites like Bittrex, Binance, GDAX, and Coinbase, it is possible to envision an online shopping platform where the price of products constantly changes to reflect the value of the accepted coins.

As well as trading and purchasing, it is possible to mine this crypto, though this is a very technical activity and requires a decent amount of computer knowledge. A good computer is enough to mine coins very slowly, but a serious miner would use processing units that rapidly solve mathematical equations that support the blockchain.

Trading Litecoin

The rise in popularity of Litecoin and other cryptocurrencies is largely in response to the demand for alternative currency options that separate themselves from centralised banks and governments. The other side of the demand is from traders and investors who have realized the massive potential that cryptocurrencies have to offer, and so many stock and forex traders have changed market (remember, the market grew from $17.7bn to $650bn in one year). Cryptocurrency is arguably easier to enter for traders, meaning that in 2017, millions of beginners, as well as seasoned traders, began buying and selling different coins.

Litecoin as a worldwide tool

Litecoins can be used anywhere (though illegally in some nations), by anyone. The fees experience by Litecoin users are lower than those of credit card companies and bank transfers. As an example, one person in France can send a payment to someone in China in seconds, with both parties receiving proof of the transaction (which will be stored on the blockchain). Litecoin was designed to enable quick and cheap payments that are as simple as sending an email.

How many Litecoin are there?

There can only ever be 84 million Litecoins, and as it stands, 55.58 million have been released or mined already, meaning almost 30 million coins are still fair game for miners. The figure of 84 million was based on the 21 million limit of Bitcoin, and the fact that Litecoin was designed to be 4x faster than Bitcoin.

A fixed amount of coins also means that inflation will not affect the overall value of the currency, unlike currencies such as the dollar, pound or euro. For forex traders who feel that a currency might drop in value, they may purchase Litecoins and hold on to their investment before selling back into their currency (hopefully at a profit). External influences (such as governments) can manipulate the value of their currency through inflation and quantitative easing, but the same cannot be done with Litecoin, making it more sustainable long term.

Who created Litecoin?

Litecoin was created by Charlie Lee in October 2011. Lee is a former employee of Google, who designed it to complement Bitcoin by solving some of its issues, like transaction times, fees, and concentrated mining pools. Charlie Lee took the core code from Bitcoin and made his modifications to the code and protocol to work in a way that he felt would best allow for the large-scale adoption of the currency.

One of the main goals was to reduce block confirmation timings from 10 minutes to 2.5 minutes, so that more transactions could be confirmed. This made Litecoin 4x faster than Bitcoin. Each 2.5 minutes, a Litecoin block is mined, and 25 coins are generated. This means that at the moment, 14,400 Litecoins are being mined every day, the maximum amount possible.

Conclusion

Litecoin has so much scope for growth, potential uses, and wide adoption. Right now, we must observe which companies begin adopting it and accepting transactions for their products and services. Other than that, the future of Litecoin is anyone’s guess.

Scroll to top

Listen Now