One of the many great contradictions related to the rise of cryptocurrencies, is that for all the hype and publicity related to the spectacular rises in valuations and fortunes accrued by entrepreneurs and tech gurus, over 40% of those surveyed in a recent survey by CreditCoin.com don't know how to buy a digital token. It's not hard to see why there's such caution from the average retail investor, the technical knowledge needed to set up a digital wallet is considerable, the lack of transparency combined with a number of high-profile hacking scandals has led to understandable reservations from the average retail investor.
The barriers to more widespread adoption go beyond mere misconceptions about security and technical abilities needed for trading. There are over 1,000 altcoins currently in circulation however many need to be purchased with other mainstream digital currencies such as Bitcoin before being purchased on an exchange that might not be easy to register on. Transaction costs and liquidity issues abound, making it harder for the average retail investor to access the full spectrum of potential investment opportunities without risking large sums of money that they might not necessarily feel comfortable doing.
These obstacles are real and prevent potential retail investors engaging with small scale cryptocurrency investment, in large part this is why Coinsquare, a leading digital currency trading platform partnered with payments solutions provider Processing.com.. The partnership aims to enable online payments functionality for Coinsquare customers so that they can buy digital currencies with their credit or debit cards instantly. Initially customers will be able to buy up to twelve leading digital currencies including Bitcoin, Ethereum, Ripple and Dogecoin, Dash and Bitcoin Cash on the Coinsquare platform that currently facilitates approximately $5Bn per annum of digital currency trades and is expecting considerable growth.
The decision to enable credit and debit card payments was driven by the idea of democratisation of choice and empowering potentially interested people to engage with cryptocurrency markets who otherwise wouldn't have been able to. Retail investors will be asked to fill in question forms in order to comply with KYC compliance, however the process is straightforward and streamlined to ensure ease of use for customers. The introduction of KYC compliance and greater scrutiny regarding the origin of funds by Processing.com on the Coinsquare platform, will it's hoped be a small step towards a more transparent and accountable cryptocurrency ecosystem.
Regulators around the world are beginning to wake up to the increasing prominence of Blockchain technology and cryptocurrencies in the financial system. As more and more ICOs start incorporating KYC/AML compliance tools and mainstream exchanges offer Bitcoin futures the outline of a potential framework for cryptocurrency engagement with the mainstream financial markets is emerging. There are legitimate concerns regarding the origin of coins mined using proof-of-work and how they are accounted for and the impact large volumes of hot money flows can have on increasingly interconnected financial markets.
That said, by increasing the number of people engaged with cryptocurrency markets in a regulatory compliant and easy to use format, Processing.com aims to help build in 2018 the critical mass of users needed to ensure cryptocurrency investing enters the mainstream and is no longer viewed as the preserve of a narrow elite of tech geeks and investment gurus. With more and more people from a non-technical background investing in cryptocurrencies, the application of Blockchain technology and its various uses will be better known to potential businesses and other audiences who wouldn't have otherwise thought of using a distributed ledger.
Being able to purchase digital currencies using a credit or debit card in a safe compliant way from a cryptocurrency exchange is a significant step in broadening access and legitimising cryptocurrencies with regulators and the broader public. It is hoped that as the broader public gain awareness of what Blockchain technology has to offer it will feed in to the way in which financial services providers, businesses and government authorities interact with them. The speed with which financial transactions are carried out, logistics are managed and the way in which personal information is stored are long overdue for change.
Processing.com hopes to bring Blockchain technology and cryptocurrencies into the mainstream by facilitating greater engagement from a broader group of people. Incorporation of this technology into the mainstream has the potential to transform how traditional industries operate, ironically by enabling more people to purchase cryptocurrencies and invest in ICOs, Processing.com will demonstrate the utility of these coins and technology beyond mere investment. Broadening access to cryptocurrency investment is a small step on the path towards a future where people understand Blockchain technology and its potential application. Few could have predicted the meteoric rise of altcoins just a few years ago and it would be a very brave person to predict their future, however increased use and engagement from as large a group as possible will ultimately decide its use and application, something Processing.com aims to support.