HomeIndustry and Adoption10 Possible Ways for Cryptocurrencies to Increase Their Trustworthiness

10 Possible Ways for Cryptocurrencies to Increase Their Trustworthiness

Date:

Related stories

Top 10 Provably Fair Bitcoin Casinos for 2024

In the world of online gambling, transparency and fairness...

Blockchain Life 2024 thunderstruck in Dubai

Dubai, April 17, 2024 - The 12th edition of...
spot_imgspot_img

People were already skeptical of cryptocurrencies, and with the recent blow-up of FTX, things have gone from bad to worse. It’s clear that, to keep growing, cryptocurrencies will have to find a way to earn public trust and get back into people’s good graces. Here are the top ten possible ways to gain this trustworthiness.

1.   Stablecoins

There’s nothing that people fear more (when it comes to cryptocurrencies) as much as their volatility. So, tying cryptocurrencies to something more reliable might be the way to give it more credibility.

Stablecoins are cryptocurrencies whose value is tied to either a fiat currency (USD, EUR, GBP, etc.), commodity (gold, silver, etc.) or even has an algorithmic backing. Either way, its value is tied to something people trust more. As long as the original asset retains or grows its value, the value of stablecoin should also remain intact.

As people become more familiar with stablecoins, they might develop a more positive opinion of cryptocurrencies. This might also boost the concept of DeFi in the future.

2.   Utility tokens

With the introduction of different digital currencies, the whole crypto world will expand and appear more legitimate. The problem is that you can’t just rely on public perception. The utility should also generate this need, which is why utility tokens may be the answer and a path forward.

Utility tokens are digital currencies that serve as an on-platform currency. Think of them as an in-game currency that you can use to purchase units, items, etc. This way, everyone who spends time on that platform is a potential user. The potential size of the user base will, therefore, perfectly correlate with the usefulness and popularity of the service/platform.

3.   Wider adoption

A few years ago, no one could have predicted the current state of cryptocurrency adoption. In some cities, you can even buy a hot dog with Bitcoin, but the problem is that these are examples and not the rule.

Sure, many platforms offer you a chance to pay with Bitcoin, and e-commerce spearheads this revolution. As more and more platforms adopt crypto as one of the payment options, it will give the asset more legitimacy in the eyes of the public.

Once people realize they can make borderless transactions instantly and with low fees, they’ll feel the call to get their crypto wallets and try this payment method.

4.   More regulation

There are two reasons why more regulation will lead to the growth of trust in crypto. First of all, people don’t trust the altruism behind crypto developers. Everyone needs rules to ensure that greed and cutting corners don’t prevail.

Second, you need to understand that crypto is inevitable. Before the regulation, these laws could go in any direction. Once things are regulated, the matter is settled, and everyone will know exactly what they’re dealing with. It’s the inevitability and the uncertainty that lead people to hesitate.

5.   Insurance coverage

Another thing that people are worried about is the fact that there are no protective mechanisms to safeguard their assets from malicious third parties online. Not only that, but once stolen, it’s near impossible to trace cryptocurrencies.

However, digital asset protection, cold and hot wallet coverage, and third-party custodian protection could turn this franchise around. With each protection mechanism, you’ll turn more and more people to join your cause.

You see, the thing is that you already have courageous investors buying crypto. What you’re now looking for is a way to attract those that fall a bit more on the conservative side. They need guarantees and safeguard mechanisms. Insurance coverage for crypto assets could be just that.

6.   Improvement of blockchain

The fear of cybersecurity threats is not endemic to cryptocurrencies, but it’s a major fear that the majority of the general public shares. After all, these assets don’t even exist in the digital world. While 92-93% of all money is already digital, in people’s minds, it’s somehow less endangered than cryptocurrencies.

With the advancement of blockchain technology, people will realize that altering crypto-related data is just as likely as telepathically stealing physical money from the bank.

Not only that but blockchain improves privacy features and has many potential utilities. For instance, smart contracts are only reliable with blockchain technology.

In fact, blockchain is sometimes mandatory for the coin in question to fulfill regulatory compliances.

7.   Greener technologies

Not only are cryptocurrencies facing a lot of skeptics, but they’re also accused of not being green enough. Well, this is a flaw that many Bitcoin mining facilities are trying to rectify.

These accusations are not baseless. If you’ve ever considered crypto mining, you probably did some research on what your power bill would be. However, this doesn’t account for energy-efficient mining. Modern racks can operate with optimal efficiency on minimal resources.

Moreover, some cryptocurrencies are directing their resources toward looking for eco-friendly solutions, which means that they’re offsetting mining operations with carbon credits and green projects. This way, they’re trying to make up for the damage they’re causing to the ecology.

8.   Greater public awareness

You’re always scared of what you don’t understand. While many people would attribute pure greed to why more people are involved in crypto than before, you shouldn’t be so pessimistic about human nature.

Namely, since the explosion of cryptocurrencies in 2017 and then again in 2021, more people have learned about crypto. Suddenly, this wasn’t just something for your local gamers and programmers. Everyone from your hairdresser to your baker wanted to know more about cryptocurrencies, bitcoins, and NFTs.

With greater public awareness and more learning materials, the trend will grow. Already, there are more platforms, blogs and e-books on this topic than ever before.

9.   Greater transparency

Another thing that worries even the more finance-savvy people are transparency-related issues. Namely, the lack of regulation is a serious problem, but we’ve addressed this already. There’s also the matter of auditing and reporting by third-party institutions, which is currently largely absent from the industry.

The biggest thing that could lead to greater transparency is open-source development. Many cryptocurrencies are built on open source already. By making their codebase accessible to the public, there’ll be less talk about scrutiny in this field.

Public blockchains like Bitcoin and Ethereum are already doing wonders for the credibility of this field, and it’s only a matter of time before this capitalizes to its full extent.

10. Longer history

Sure, cryptocurrencies have existed since 2009, but it’s only been a few years since they’ve caught the wider public’s attention. It’s just too new compared to any other asset or resource.

Just think about how gold was used as a currency six thousand years ago or how you had landlords and rental properties in Ancient Greece. The thing is that while a lot of people have made millions on the Bitcoin explosion, the majority of people are still waiting to see how it will play out.

In a few years, when people see that the ups and downs in the cryptocurrency field are the same as anywhere else. They’ll start approaching, perhaps even using it more often.

As they become more useful, more regulated, and older, cryptocurrencies will become more trusted

There’s no skipping the line. Not even paper money was immediately trusted by everyone when it was first introduced. Cryptocurrencies have a long way to go before they’re universally recognized and widely adopted. Still, for such a new asset, one might argue that they’re making a fairly good progress.

 

Image source

 

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

spot_img