The Evolution of Cryptocurrency: From Monero To Mainstream
By: Rafi Glantz
In the original Bitcoin White Paper, the stated purpose was avoid financial institutions and remove the necessity of a trusted third party to prevent double-spending. Some realized the appeal and potential in that removal immediately, but most took a bit longer.
A Sleepy Start
Initially, the avoidance of financial institutions and third parties was a major draw for cyber and other criminals, and cryptocurrency was considered by most to be illegitimate and a tool for money laundering. Benefits of crypto and blockchain like the immutable public ledger were largely ignored because their origin (crypto) was not widely trusted. Even today most newcomers to crypto are suspicious; either because they don’t understand it or they don’t trust it (which is generally because they don’t understand it).
The Darknet
As such, Bitcoin was relegated to the Darknet, where various illicit substances and services were (and I assume still are) bought and sold. Luckily, marketplaces like the Silk Road got shut down fairly quickly and the perpetrator(s) brought to justice. As it turns out, having an immutable public ledger can be an issue for lawbreakers once an address or public key is linked to an IP address or a name. With today’s technology (and a FISA warrant or similar), it’s a snap for law enforcement to do that, so Bitcoin isn’t a great choice anymore if you’re breaking the law.
Ransomware Attacks
That’s not to say cryptocurrency isn’t still used illegally, ransomware attacks have been growing in strength and frequency lately. In these attacks, hackers will lock down the target computers and essentially hold them ransom (hence ransomware) until a sum of money is paid in a currency like Monero. Privacy coins like Monero are controversial because they enable truly anonymous transactions that aren’t stored on the public ledger. While it’s not illegal to transact anonymously (what is physical cash but an anonymous transaction?), it does open doors for illicit activity. Even today, rumors swirl about North Korea funding its nuclear program with Monero extorted in ransomware attacks!
Moving Forward
Despite the negative press from the very existence of these bad actors, public successes like shutting down the Silk Road helped open blockchain and cryptocurrency to more legitimate investment and improvement as well as appeal to a wider audience. Even so, the Bitcoin White Paper is directed at a fairly technical reader, and early wallets and interfaces were (and some still are) bare-bones at best. For a tech-oriented user this isn’t a deal-breaker but for someone who doesn’t understand the White Paper, trying to use the early interfaces would be so confusing and intimidating they’d probably give up. In fact, this is exactly what happened, as adoption has been limited largely to a tech audience.
Crypto Credit Cards
In order to appeal to a wider range of consumers, companies like TenX created debit and credit card solutions that could integrate with cryptocurrency. This was very attractive to consumers because it made sense to them and it was a physical swipe card, which they already have in their wallets. Unfortunately, this didn’t work as well as intended, because the two technologies (Visa/Mastercard payments and crypto) don’t mesh properly and cryptocurrency fluctuates in value so quickly it’s difficult to know how much you have on your card. Finally, Visa and Mastercard stopped supporting these cards, so they’re not currently usable.
Physical Bitcoin?
Introducing people to new topics and new material using familiar things is an effective strategy, but the existing infrastructure in this case is insufficient and ill-suited to the task, as shown by TenX and others. Innovators in the field are now exploring new ways to open cryptocurrency to the public. Some, like Tangem, are creating tangible (get it?) bitcoin notes. According to a recent article, the notes only cost the company about $2 each to manufacture, and they can be physically exchanged from person to person anonymously and off chain. This is another example of appealing to the public with something simple; it’s much easier for a beginner to grasp Bitcoin if they can actually grasp their Bitcoin. Simultaneously, requiring the note to physically change hands in order to exchange the value within negates a great deal of the advantages of cryptocurrencies.
A Meeting Point
The best solution maintains the competitive advantages of cryptocurrencies while mitigating the difficulties of adoption and acceptance. Zeex does this by enabling the direct and seamless exchange of crypto assets and virtual gift cards. The gift card infrastructure is very robust and already accepted by retailers, and that’s exactly what’s lacking in cryptocurrency payments right now. Plus, the application interface is designed to be simple enough for a dolphin to operate (3 taps and you’re on your way!).
The Future
Crypto’s path to the mainstream will likely mirror that of the internet, in that adoption was quite slow until attractive applications that focused on user experience and interface came to the fore. Developers often build things for themselves rather than for a non-technical audience until they’re told to direct their efforts to the general public. In my opinion this has been a real problem for the crypto community because for most of its history very few non-developers even knew it existed, so they didn’t bother making anything for people like you and me! Recently companies have caught on and begun building far more user-friendly applications, which is a step in the right direction. At the end of the day, the entire community is pushing for the normalization and mainstream adoption of cryptocurrency, and every step further along that path is a success.
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