Though this growth is promising, we have some ways to go before digital assets can be considered “mainstream.” And as an alternative form of money, digital assets must provide alternative value offerings to our legacy systems in order to have value in itself. Even as the balance tilts toward adoption, only 10% of us understand the capabilities, and limitations, of cryptocurrencies.
Justifiably, these problems have attracted high-level attention, with the Chairman of the Federal Reserve Jerome Powell lamenting on how extant financial rules do not begin to cover the digital asset market and ECB President Lagarde remarking how digital assets are “shaking the system.” But as menacing as these obstacles may seem, the most pressing problem is not a technological shortcoming, but something much more simple:
Adoption lag in digital assets is a human problem.
We’re still in the early stages of the technology, and it’s natural to be skeptical of things we don’t fully understand (remember the Y2K scare?). But, this situation is even more pressing because many of us are more skeptical of the current financial system. It sometimes seems like the incumbent financial players’ interests go against their consumer’s best interests. Not to mention, the current system is still plagued by the same technological problems, especially security — the Equifax payout of $700M is a great example.
It’s clear we need to move beyond the limitations of our ailing financial system.
And the remedy is digital assets.
Though there are still some glitches we need to fix, the race is underway… and we’re making headway every day. Developers, affluent individuals and large institutions are actively trying to solve these issues:
An idea cannot live unless people believe in it.
And belief requires trust. Trust is an issue plaguing financial services across the board, as Deutsche Bank layoffs come on the heels of crippling confidence in the financial institution, and the seemingly-endless list of Wells Fargo scandals grows and grows.
In fact, the whole financial sector has been plagued after plunging our economy into the “Great Recession” in 2008. Perhaps in order to make up for diminishing margins, banks have become more aggressive in limiting exposure — in extreme cases, this includes committing crimes against active-duty military personnel. The current financial system’s problems keep coming to light, and the SEC keeps issuing fines for illicit and unethical practices.
But as old-world mainstays are slowly being dismantled, the digital assets sector moves forward….
And digital assets will combat most, if not all, of the problems plaguing our current financial system. Thanks to the blockchain, trust is no longer required of parties banking on the decentralized ledger technology (DLT). The transparency that comes with DLT will make us all masters of our own money. And the removal of barriers to entry fortified by our financial incumbents — such as Bank of America, whose free, “no-minimum” account requires a $1,500 daily balance or $3,000 a year in direct deposit — will promote inclusion for the 8.4 million unbanked households in America in 2017.
To spark adoption, we need to bolster our understanding of, and trust in, digital assets. As a society, we need to wrap our heads around digital assets and the revolution that’s underway.
Though there are some technological concerns with digital assets, many experts agree “blockchain’s adoption problem is a human problem…”, a problem that ripples onto all projects built on the distributed ledger technology.
So we need to decide: can we turn a blind eye to the misdeeds perpetrated by the current financial systems?
Anything that brings stability, trust and access to our global economy is a victory. And digital assets could bring just this… if we’re able to solve our own “crypto-ceptual” problems.
We need to take this into our own hands before Big Tech sinks its FANGs into crypto, and the incumbent system places us into yet another financial stranglehold.
This article was written on behalf of Arca, an institutional grade financial services firm building products utilizing and investing in digital assets. I do not hold a position in Arca and write on a freelance basis for them.
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