MAIN ISSUES FOR ADOPTION OF CRYPTOCURRENCIES AS PAYMENT MEANS
Keywords:
bitcoin, blockchain, cryptocurrency, electronic payments, moneyAbstract
In our research we have investigated the main issues that drive or limit further adoption of cryptocurrencies, specifically as means of electronic payments. The original intention of Bitcoin, the first decentralized cryptocurrency, was to serve as electronic payment system but it still hasn’t (entirely) fulfilled its mission regardless it is sporadically used for payments. Recent studies reveal that the cryptocurrencies and the blockchain, as promising new technology, are starting to have noticeable adoption worldwide, but even with many noted advantages, this technology is not yet matured and still lacks the expected mass adoption, especially in the area of the electronic payments. Bitcoin and many newer digital currencies are more acknowledged and accepted as an investment asset but not that much as a payment method. Regarding the online payment facet of the cryptocurrencies, there are still several issues that need to be addressed in a proper way in order to ensure further adoption of this technology and to successfully compete, or even disrupt, the currently dominant electronic payment systems as digital wallets, banking cards, banking transfers and even cash on delivery. The adoption issues, that we examine in this paper include the following: decentralization, volatility, legislation, trust, security, fees, speed of transactions, scalability, interoperability and energy consumption. Relevant and current literature was studied to identify the main properties of the leading cryptocurrency projects, advantages and disadvantages of the blockchain technology, utilization for electronic payments, adoption drivers and current state of adoption. Additionally, at least 31 different cryptocurrency projects (whitepapers, websites and communities) and several relevant web resources were investigated in order to draw conclusions regarding the main adoption issues. Our findings suggest that crucial issues that still need to be solved in order to achieve wider adoption of cryptocurrencies for payments are (i) the high volatility of their value and (ii) the unfavorable legislation worldwide. The other important issues are mostly technical and since the technology is still in development and not fully matured, there is still room for further improvements before it gets ready for mass adoption. Our research adds to the existing cryptocurrencies and blockchain studies by identifying, summarizing and envisioning possible solutions for the issues for further cryptocurrency adoption. Besides for academic researchers this study may serve as a reference for blockchain developers, cryptocurrency advocates and policy makers
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