​What Is Cryptocurrency Utility and Why It’s Important for the Development of Crypto Payments.

​What Is Cryptocurrency Utility and Why It’s Important for the Development of Crypto Payments.

Cryptocurrencies have come a long way in the recent decade, evolving from a marginalized payment method for questionable transactions to publicly traded instruments on the largest global exchanges. Nonetheless, these drastic changes remain insufficient for fulfilling the “currency” function of the crypto. Specifically, cryptocurrencies are far from competing with fiat currencies for becoming the medium of exchange.

We decided to consider the current state of cryptocurrencies and their utility while examining the steps needed for reaching their maximum potential.

Definition and sources of utility
When holding a USD 100 bill, a person is highly certain of its utility. In particular, it is possible to make purchases of goods and services, invest, or acquire various financial instruments. The mentioned certainty stems from the decades of evolutionary processes within the global financial sector. Despite the longevity of the prevalent ecosystem, fiat currencies still undergo recession periods associated with a range of factors. On the other hand, cryptocurrencies remain in the early stages of their development, contributing to a list of risks.

In regard to profit generation, the introduction of the new, yet relatively reliable, crypto trading platforms and organizations have become a significant contributor toward the evolution of crypto. These instances, including the introduction of contracts paying out in bitcoin (BTC) on the Intercontinental Exchange(ICE) along with the launch of exchange-traded funds (ETFs) continue to lower the volatility of cryptoassets, making them more attractive to institutional investors.

While cryptocurrencies are gaining prominence in the traditional investment community, their utility remains vague to the global population. Specifically, the complexity of the cryptoassets and concerns related to their safety prevent a broader use. Furthermore, it is more common to say “investing in cryptocurrencies” rather than “using cryptocurrencies.” The phrasing is important in this case, as it reflects the general attitude towards crypto, namely its utilization as an investment vehicle instead of the medium of exchange.

Specific cases and statistics
A shared understanding of the underlying assets remains limited, even within the crypto community. For instance, a recent poll held in February 2021 indicated that only 16.9% of crypto buyers have a full understanding of digital currency. Another 33.5% had an “emerging” level of understanding. These values reflect the opportunistic approach towards cryptocurrencies in their treatment as investment assets.
The study conducted by the National Opinion Research Center (NORC) at the University of Chicago indicated that the primary reason behind people avoiding investments in cryptocurrencies is their lack of understanding. 62% of respondents cited this reason, followed by security at 35% in second place. The availability of resources for investing and lack of knowledge related to the investment process was in the third and fourth spots respectively. Volatility and spending limitations were in the fifth and sixth spots.

​What Is Cryptocurrency Utility and Why It’s Important for the Development of Crypto Payments.

Cryptocurrencies have come a long way in the recent decade, evolving from a marginalized payment method for questionable transactions to publicly traded instruments on the largest global exchanges. Nonetheless, these drastic changes remain insufficient for fulfilling the “currency” function of the crypto. Specifically, cryptocurrencies are far from competing with fiat currencies for becoming the medium of exchange.

We decided to consider the current state of cryptocurrencies and their utility while examining the steps needed for reaching their maximum potential.

Definition and sources of utility
When holding a USD 100 bill, a person is highly certain of its utility. In particular, it is possible to make purchases of goods and services, invest, or acquire various financial instruments. The mentioned certainty stems from the decades of evolutionary processes within the global financial sector. Despite the longevity of the prevalent ecosystem, fiat currencies still undergo recession periods associated with a range of factors. On the other hand, cryptocurrencies remain in the early stages of their development, contributing to a list of risks.

In regard to profit generation, the introduction of the new, yet relatively reliable, crypto trading platforms and organizations have become a significant contributor toward the evolution of crypto. These instances, including the introduction of contracts paying out in bitcoin (BTC) on the Intercontinental Exchange(ICE) along with the launch of exchange-traded funds (ETFs) continue to lower the volatility of cryptoassets, making them more attractive to institutional investors.

While cryptocurrencies are gaining prominence in the traditional investment community, their utility remains vague to the global population. Specifically, the complexity of the cryptoassets and concerns related to their safety prevent a broader use. Furthermore, it is more common to say “investing in cryptocurrencies” rather than “using cryptocurrencies.” The phrasing is important in this case, as it reflects the general attitude towards crypto, namely its utilization as an investment vehicle instead of the medium of exchange.

Specific cases and statistics
A shared understanding of the underlying assets remains limited, even within the crypto community. For instance, a recent poll held in February 2021 indicated that only 16.9% of crypto buyers have a full understanding of digital currency. Another 33.5% had an “emerging” level of understanding. These values reflect the opportunistic approach towards cryptocurrencies in their treatment as investment assets.
The study conducted by the National Opinion Research Center (NORC) at the University of Chicago indicated that the primary reason behind people avoiding investments in cryptocurrencies is their lack of understanding. 62% of respondents cited this reason, followed by security at 35% in second place. The availability of resources for investing and lack of knowledge related to the investment process was in the third and fourth spots respectively. Volatility and spending limitations were in the fifth and sixth spots.