The Cryptocurrency Dilemma, Part 2
Last week we shared our view of the cryptocurrency landscape from 30,000 feet and exposed a major roadblock to wider user adoption: a lack of risk-balanced and diversified entry points into cryptocurrencies. In Part 2, we are going to look a little more closely at the current challenges and offer some insight into how we intend to resolve them.
Why are cryptocurrencies still such a niche market?
Given the extraordinary growth in the cryptosphere, you would think more “mainstream” users would be rushing into the marketplace. But the truth is, new entrants to cryptocurrencies have only a handful of reasonable strategies and none of them are ideal. Broadly speaking, a potential new cryptocurrency user has the following options:
- They can simply acquire bitcoin, the coin they’ve heard the most about. This is poorly exposed and grossly simplistic.
- If they are more adventurous, they can manage a self-selected portfolio of multiple cryptocurrencies on a centralized exchange. A ton of research is required to build an effective portfolio and entrusting private keys to a third party poses serious security risks.
- They can download an array of different wallet clients to store all their coins and manage their passwords locally. This requires a high degree of effort and substantial technical ability.
- They may entrust their cryptocurrency acquisition strategy to a friend who seems to know what they are doing. This will do little to help them learn how to function autonomously.
- They may spend countless hours tracking news, price movements, and acquiring the expertise required to make sense of the information. This steep learning curve imposes an enormous burden on time and attention and will deter all but the most dedicated individuals.
These approaches and their shortcomings will dissuade many people from entering the cryptosphere. This is because whatever approach a first time buyer chooses, it is likely to be hampered by inadequate exposure, a questionable security position, lack of user-friendly and securely managed involvement platforms, and a lack of cryptocurrency education. At this time, there is no obvious avenue for “mainstream” users not already savvy in cryptocurrencies, nor is there an easy way to balance assets to track overall market trends, even for more experienced users.
Three major impediments to wider cryptocurrency adoption, and how we plan to remove them
In analyzing the strategies currently available to most users, Cryptodex has observed that widespread growth of cryptocurrency adoption is currently impinged by three critical challenges, each of which our platform will ultimately solve. Let’s take a look at each of those challenges and how we can overcome them.
The Need for diversification and risk balancing
As we pointed out last week, right now current investment strategies are too volatile and to risky for most people looking to balance their assets and safely engage this new sector of the economy. By offering carefully curated and expertly vetted cryptocurrency pools, Cryptodex achieves diversification and risk balancing in these critical ways:
- Our Pools provide inherent risk balance as they spread the allocation across a spectrum of coins. This prevents critical loss if any one coin has a serious flaw or the associated project suffers a catastrophic setback.
- Because many of the pools are structured around broad concepts designed to capture large innovate market trends, ALL of the coins approaching a certain challenge can be encompassed into a single pool. Most of the coins in the pool can fail; as long as one coin succeeds, the pool has a chance to be a success. Blockchain technology has the ability to revolutionize a huge number of industries. In each industry, multiple projects may coalesce around a single problem or opportunity. A Cryptodex pool aligns users with the totality of effort and innovation in a given area, optimizing the chance of success.
- Cryptodex extensively vets each coin before even considering placing it into a pool. Any coins included in a pool will have already been thoroughly researched and documented (in the education portal) by Cryptodex. Value propositions on each pool are also taken into consideration which allow for a meta perspective on the user’s entire portfolio risk level.
The Need to Improve Accessibility to Cryptocurrency Platforms
In its current state, the cryptosphere is too technical to be accessible for most people. If a person is not extremely savvy regarding key management, finance, or the technical implications of various new platforms, they will have limited opportunities at being effective with their acquired crypto assets. Many people have never managed their own funds and are accustomed to keeping their money in banks or having it managed by a financial advisor.
The Cryptodex platform will give everyone, regardless of experience level, the opportunity to participate without requiring a comprehensive understanding of the markets, complex trading strategies, or blockchain technology. Our primary aim is accessibility and ease of use. The user experience will be intuitive and understandable for anyone familiar with basic online financial applications. And because Cryptodex provides a bridge into the cryptosphere for potential adopters without cryptocurrency experience, as well as a sophisticated tool for more seasoned enthusiasts, our application will provide high level market insights while maintaining a human feel and simplicity.
The Need for Better Education and Wider Reach
“Mainstream” adopters of cryptocurrencies will probably lack an adequate understanding of the conceptual and practical implications of various blockchain platforms. They will not have the necessary tools or vocabulary to evaluate cryptocurrencies effectively, nor will they able to easily understand the benefits of various emerging platforms and their corresponding technical innovations. Without appropriate education, new adopters do not know how or why to choose cryptocurrencies and may not clearly understand the benefits and pitfalls of their decisions.
The key to enabling widespread adoption and long term growth in blockchain technologies is excellent education and support. It is imperative that users be able to learn at their own pace while simultaneously establishing positions in the marketplace. A trustworthy, clear and friendly voice is needed to help new adopters gain confidence and knowledge.
Our education portal aims to provide the most comprehensive cryptocurrency education experience available today Cryptodex users will become autonomous and confident operators in the cryptosphere, with an understanding of large market trends and a forward looking perspective into decentralized markets and the innovative potential of cryptocurrencies.
Each alternative cryptocurrency will have a dedicated section on the portal, which provides information for everyone ranging from the new entrant into cryptocurrencies to the most advanced technical users. These articles will break down each coin, starting from high level concepts, and moving into the technical innovations underpinning the functionality.
Cryptodex will also provide comprehensive and easy to grasp overviews of blockchain technology and cryptocurrencies in general, assisting new entrants to the space develop an understanding of the philosophical, structural, and technical implications of the entire sector. In this way, Cryptodex is positioned to be not only a revolutionary pool platform for cryptocurrencies, but also one of the preeminent thought leaders and translators of blockchain technologies for a wider “mass market” audience.
Get Involved with Cryptodex
By removing the three major impediments to cryptocurrency growth, we anticipate a vastly expanded cryptocurrency user base in the coming years.
We look forward to welcoming a new and diverse set of participants to the cryptosphere and invite you to join us!