Cryptocurrency advanced from being a mere academic concept to reality in 2009 with the creation of Bitcoin. Since then, the sector has grown in popularity. However, it has failed to attract a large number of potential investors.
FREMONT, CA: In its initial years, people were apprehensive about this new form of currency and modes of transportation. Although there has been a change in its perception, the crypto sector fails to impress the majority of investors. As per several recent studies, less than five percent of millennials have invested in cryptocurrency.
Digital currency gives traders access to many practical benefits. For instance, cryptocurrency enables instant payments, brings down transaction fees, and eliminates territorial boundaries, besides many others.
In spite of the advantages, it appears that many business professionals find cryptocurrency less convincing as a risk-free investment option. Here is the list of possible contributors to the situation.
Similar to any online business, the crypto sector poses a certain vulnerability to security. Moreover, the year 2018 had recorded several crypto market frauds. The crypto sector has shown a tendency to more or less neglect the importance of cybersecurity. Further, unlike regular transactions, the industry lacks strict regulations.
As cryptocurrency tends to be a decentralized asset, there needn't be a central authority to control or govern the market. It is imperative to mention here that while many get attracted to the sector due to lack of regulation, the same factor has contributed to people opting out of it. Lack of regulation paves the way for continually altering protocols, and in case of a loss, there is nobody to complain to.
As per many industry observers, the most critical factor for the lack of interest in cryptocurrency is the price volatility. The crypto market continues to be unstable and fragile. For beginners in the business, this is a matter of huge concern as they lack adequate information about its assets.
As an example, Bitcoin was not even $1,000 in worth towards the beginning of 2017. However, by the end of 2017, Bitcoin was valued more than $20,000. However, within a few months, it took a downward plunge to a mere $6,000. This price volatility continues to be a huge deterrent.
Cryptocurrency transactions often fail to process over a few dozens of transactions per second. As a result, the sector is way behind in scalability when compared to traditional financial transactions.