By Xiaohan Zhu, CEO of Meter
A study by Meter surveyed 1,000 US adults who were familiar with cryptocurrency. Survey respondents were contacted through Amazon’s Mechanical Turk and were asked 30 questions surrounding their perceptions around the use of cryptocurrencies. Respondents who owned cryptocurrencies were asked about their experiences and concerns, if any, around purchasing and using cryptocurrencies. Those who did not own any cryptocurrencies were polled on reasons they had not invested.
As technology has advanced, we as a society have shifted our spending tendencies toward electronic forms of payment. According to Meter’s survey, 86 percent of respondents make less than half of their purchases with cash.
With an overwhelming majority primarily using electronic forms of payment, using a digital currency – or cryptocurrency – as payment makes sense: nine in 10 respondents would use a cryptocurrency that is stable and accepted as a form of payment almost everywhere.
However, both enthusiasts and skeptics agreed that volatility is the biggest issue surrounding cryptocurrency – almost 90 percent worry about it. Of those who already own cryptocurrency, 60 percent cited volatility as the most inconvenient aspect of using it.
Of the respondents who did not own any cryptocurrencies, almost half said volatility is the primary reason they had not invested. More than three-quarters would be more likely to purchase cryptocurrencies if they were less volatile.
Given today’s political climate, an undertone of distrust with today’s institutions was also apparent: nearly three-fourths of respondents would prefer to use a stable cryptocurrency that could not be manipulated by governments or banks. Just over one-third of respondents are satisfied with the US government, and less than one-fourth believe the US government is ethical.
Governments have typically issued currencies and often controlled their value by managing exchange rates through a central bank, but it seems we are moving away from traditional institutions towards decentralized models. As household names like Google, Amazon and Facebook explore the application of blockchain technology in their offerings, there seems to be a growing interest in decentralization.
We’re spending more time than ever in front of our computers and smart devices: the virtual world, which has no physical limitations or political boundaries. The virtual world has made society more decentralized and we need a digital currency for this new decentralized society.
Cryptocurrencies were created with the vision of being decentralized, streamlined units of value that can be used worldwide without manipulation.
To serve our interconnected society, which brings together people, goods, services and ideas from across disparate and distant borders, we need a global digital currency that serves the three core functions of currency: (1) unit account, (2) medium of exchange and (3) store of value. No cryptocurrency today functions as a true currency.
With a reputation for violent price swings, cryptocurrencies today do not serve as a stable unit of account; they function largely as assets for investment or speculation. Because of their volatility, cryptocurrencies do no function as a practical medium of exchange or as an adequate store of value.
Despite their flaws, cryptocurrencies could represent a fundamental shift in society, and it’s likely that the concept will continue to evolve. A decentralized unit of account created by the people and maintained by the people will be essential as our decentralized, connected society evolves. But for cryptocurrencies to achieve mass adoption, the first step will be to stabilize their value.