|Jul 10, 2018 10:02 AM||By: Jinia Shawdagor | 4473 Views|
New research has found that cryptocurrencies like Bitcoin (BTC) have the potential to grow a mainstream means of payment and now meet one of the three principal criteria of money, according to an eToro press release July 9. The study mentioned in the press release was a joint work by Imperial College and U.K. trading platform eToro.
The story dubbed “Cryptocurrencies: Overcoming Barriers to Trust and Adoption,” written by professor William Knottenbelt from Imperial College London and Dr. Zeynep Gurguc from Imperial College Business School, says that cryptocurrencies are the “natural next step” for money and can fit a mainstream payment instrument “in the decade.”
According to the article, cryptocurrencies are now fulfilling one of three fundamental principles of fiat money by acting as a store of value, while they yet do not meet two other requirements; working as a medium of exchange and working as a unit of account.
Per the study, Bitcoin and other cryptocurrencies want to solve six main challenges to satisfy these requirements; scalability, usability, regulation, volatility, incentives, and privacy.
The article emphasizes that new payment systems, as well as asset types, “do not appear overnight.” Iqbal Gandham, U.K. Managing Director of eToro, regarded that the first email was sent in 1971, while it practiced about three decades “to become conventional with a user-friendly interface.”
Gandham, who is also a chair of U.K.-based industry group CryptoUK, wrote that “little over eight years” have given since the first Bitcoin transaction was made, and “now we already see it begin to satisfy the requirements of everyday money.” He continued that cryptocurrency’s experience to streamline cross-border payments could be the part that “tip[s] cryptocurrencies into the mainstream.”
Professor William Knottenbelt from Imperial College told that cryptocurrencies have the potential to “upend everything we believed we knew about the nature of financial systems and financial assets,” thanks to its decentralized character.
Current week, the head of the BIS (Bank for International Settlements) Agustin Carstens challenged that cryptocurrencies “cannot understand the functions of money,” and advised “young people” upon “trying to create money.” Previously in June, BIS dedicated a 24-page article to the issue, focusing on Bitcoin’s scalability problems. The report stated that cryptocurrencies are not able to scale enough to fit a medium of exchange in a global marketplace.