Cryptocurrency has been on a transformative journey. People remain the primary users of the technology, and trust remains a fundamental element. Cryptocurrencies are yet to obtain the necessary legal status as an investment or store of value in most countries worldwide. Otherwise, many cryptocurrencies are not backe by monetary, legal, and institutional structures like traditional financial services. The trust in cryptocurrencies is born out of the technology behind them. However, not many people and even crypto users understand. The attributes of the blockchain technology that drive the trust in cryptocurrencies.
Trust is a critical attribute to financial payments and transactions.
People will be looking after transactions reasonably and safely. Cryptocurrency users want to assess and appreciate the functionality, reliability, and helpfulness of trusting any single coin out there. At the moment, cryptocurrencies suffer a few shortcomings, such as being unpredictable, risky, and volatile. At the core, cryptocurrency is a peer-to-peer electronic cash system designed to eliminate intermediaries such as banks. Cryptocurrency has brought about the disruption to traditional banking systems as users are drawn by independence. And the non-pervasive nature of decentralized nature.
The mass adoption of cryptocurrency will see truly decentralized finance. However, that goal can only be possible through trusted intermediaries. Some hand-holding is require to help everyone along the journey, such as our grandparents. Who may not be in a position to manage private keys, digital wallets, and seed phrases.
The trust intermediaries are require to successfully ensure that the mainstream aspirations of cryptocurrency and decentralized finance. Trust is a fundamental element behind everything in human interaction. For example, we trust the medical opinions given by doctors, food served in restaurants, and many other products and services. In the sphere of cryptocurrencies, we need to make the decision on who and what to trust. The ordinary citizen of the world is not savvy in matters of code and protocol available in the crypto space. The next course of action when choosing to participate in a token is based on what an individual understands. The information is collecte from people around us about their trust in the organization. Behind the protocol and whether they are acting in good faith.
Now, there are changes in how and upon whom trust is bestowe due to the development of new and disruptive technologies. We have seen people move towards putting their trust in algorithms deployed by artificial intelligence and machine learning. Studies have revealed that people are more inclined to trust technology through exposure to the specific technology.
The growing trust in blockchain technology and cryptocurrency has led to the widespread adoption of cryptocurrencies. Adoption rates vary widely across different demographics. People with the earliest exposure, such as developers and engineers. Are the early adopters moving down to people with the most minor exposure being the last to adopt cryptocurrency. Therefore, it’s the role of the early adopters to help the people with less exposure come onboard. The creation of a monopoly of sorts for people with superior technical knowledge would really water down the democratizing promise of cryptocurrencies.
Usability of Cryptocurrencies
Cryptocurrencies have usability challenges even for the early adopters and people who have internet access. Some of the challenges involve having to grapple with passwords and the management of private keys. Most people are only used to handling emails, search, and social media functions, meaning that the lack of familiarity makes acts as an impeding factor to the usability of cryptocurrencies.
Cryptocurrencies are helping to revolutionize how financial systems work by providing users with control of their assets. No more reliance on banks and other third-party service providers. The empowerment and independence can become a burden to many people who have to ensure the safety of their keys and coins. A good number of users have ended up losing their private keys and losing access to their coins, amounting to millions of dollars.
What should happen is that newbies to the cryptocurrency space should not be thrown into the deep end and drown. They should be an easing process to allow people to learn about the management of private keys to be comfortable with handling the keys and their coins.
To improve issues with trust when decentralized finance (DeFi) has a small number of users, it’s only practical that users have an easing process. It will herald further growth in the cryptocurrency space if users feel confident of what to expect. Cryptocurrency exchanges and platforms need to focus on education, user experience, and customer support to eliminate trust issues and ensure that the entire ecosystem thrives. Those platforms and exchanges that engage in educative initiatives and improving user experience will set themselves apart from the rest and put them on a growth path.
Cryptocurrencies can only achieve their true potential in achieving decentralized finance and empowering people by creating value by promoting adoption across all demographics, such as age, gender, education, geographical location, and technical knowledge. The human touch is critical to the widespread adoption of cryptocurrencies despite the promise of eliminating intermediaries.
The degree of transparency and accountability provided by cryptocurrencies is better and cannot be compared to any conventional financial institution. Blockchain technology offers a high level of transparency and accountability, eliminating the need for a trusted central authority to oversee the system. In conclusion, the core properties of blockchain technology facilitate the creation of trust in cryptocurrencies.