Government bodies and Private organisations foray into blockchain could be an early indicator of an imminent adoption of the technology and cryptocurrencies like Bitcoin
In 2014, the government of People’s Republic of China (PRC) announced a special nation-wide plan, which aimed to counter the dollar monopoly helmed by the United States. Dubbed as the “Digital Currency Electronic Payment (DCEP)” project, the central bank’s digital currency will be backed by the RenMinbi (RMB) fiat currency, suggesting a possible first national stablecoin ever created in the world. Fast forward to May 2020, the project has come to fruition as the Chinese government launched its first stablecoin payment trial in four cities - namely Shenzhen, Suzhou, Chengdu and Beijing. Should the experiment succeed, the stablecoin will be gradually rolled out for real-world use in more cities in China and the 2022 Beijing Winter Olympics.
Private organisations such as Samsung and HTC have also unveiled blockchain-based features into their flagship Galaxy S phone series and the first cryptocurrency mining smartphone Exodus 1 respectively. Therefore, both Samsung and HTC customers will be able to transact popular cryptocurrencies like Bitcoin, directly from their smartphones. On top of that, other prominent tech companies including web browsers like Opera browser and Mozilla’s Firefox have also introduced built-in cryptocurrency wallet with the first mover advantage as the first mainstream web browsers which facilitate crypto transactions.
Inherently, these companies and government bodies could potentially become one of the most significant driving forces behind cryptocurrency such as Bitcoin and blockchain adoption on a mass scale. The disruptive technology and cryptocurrencies are now available to more extensive mainstream consumers thanks to their products and initiatives, eventually shifting the power of control to the hands of the people.
Institutional adoption benefits the crypto market
In recent years, the aforementioned entities are not the only ones in the bandwagon of adopting blockchain technology for real-world usage. Governments, corporations and financial institutions are increasingly applying the technology or at the very least, looking into the feasibility of using blockchain technology for potential applications. The 2020 global coronavirus pandemic has forced the global market to rethink business operations and innovate in the ever changing landscape. Amid the quarantine enforced by governments, more working professionals are introduced to the concept of remote working. Video conferencing and online communication platforms such as Zoom, Slack and Microsoft Teams have all seen massive spikes in users since March 2020, as companies manage their daily operations online with the help of these tools.
The growing state-led surveillance through applications and measures to monitor their citizens’ activity during the ongoing global crisis has also directed many privacy advocates to push for the use of decentralised blockchain technology, as a primary tool to prevent a post-crisis future where government surveillance and pervasive access to users’ personal information may occur.
Therefore, private organizations including IBM, Oracle, Microsoft, and other tech companies, are partnering with public health organisations to develop a blockchain-based open data hub known as MiPasa, allowing global health organizations and companies to securely collaborate and distribute information without compromising users’ personal information. Despite early objections to cryptocurrency like Bitcoin and its underlying blockchain technology, it is evident that institutions are now aware of how blockchain can address many of the primary concerns that have affected corporations and their customers in the digital age. Privacy, a fundamental of human rights, along with transparency and immutable data are now known to be achievable with the introduction of blockchain across the global market.
Stability as a good Bitcoin mixer to drive adoption
Bitcoin and other prominent cryptocurrencies could benefit from the recognition of blockchain technology across corporations, governments and financial institutions. Although cryptocurrencies such as Bitcoin were created as a form of reward for contributors of the blockchain network, they have since evolved into tradable assets which could be dealt on the cryptocurrency market around-the-clock, unlike traditional stock markets. However, before Bitcoin and other cryptocurrencies are regarded as ‘serious’ asset classes, the need for stability and removal of regular market manipulation should be addressed.
In order to adopt any currency, fiat or cryptocurrency, the asset needs to be stable in order to be used as a trusted medium of exchange. Even though the volatile and manipulative cryptocurrency market brought about by the influx of monies invested to Bitcoin, may appeal to risk takers, such uncertainties may stop ordinary people from using Bitcoin and other cryptocurrencies for daily purchases. After all, the mainstream market is not yet accustomed to viewing Bitcoin and other cryptos as real money.
In addition to that, cryptocurrency financial service providers such as remittance and Bitcoin ATMs may have to re-consider charging exorbitant service fees. Without any advantage over fiat money, ordinary people may be irked by the costly charges to purchasing their first Bitcoin or cryptocurrencies when these intangible assets do not offer as much benefits as the cheaper and more flexible alternative like traditional payment methods.
Privacy - A crucial driver for adoption
Privacy is another issue impeding the adoption of Bitcoin and other prominent cryptocurrencies. While the decentralised nature of blockchain promises a future of transparency and immutability of information, permanently etched onto the blockchain network, not as much was covered for the much needed the user’s anonymity and the right to conceal their personal information from unpermitted entities or individuals. Currently, with a Bitcoin address and a blockchain explorer tool, the entire transaction activity connecting to the specific address is exposed, with no means to hide them.
Furthermore, governments and law-enforcement agencies were suspicious of the possible use of cryptocurrencies. This regulatory concern has forced many fiat-to-crypto centralised exchanges to adhere to financial regulations which may otherwise be deemed as a form of ‘privacy intrusion’. Mandatory measures such as the Know-Your-Customer (KYC) process that demands user’s data and personal information be put in their control and consent. Failure of doing so will result in the inability to fulfill further transactions in these legally compliant exchanges. This lack of identity protection has drawn a growing number of users to the attention of the missing layers of privacy needed on the blockchain, and thereby sought additional tools that could remove traces and even attain complete anonymity for their cryptocurrency transactions. Thus, privacy-enhancing tools such as Bitcoin mixers are gaining favorable tractions amongst cryptocurrency users who seek privacy for legitimate reasons.
Bitcoin mixer, or Bitcoin tumbler is a type of online service which is designed to randomise and eradicate any possible traces that may expose your transaction activities and Bitcoin addresses to bad actors and unauthorised entities. Although it may cause slight inconveniences when dealing with cryptocurrencies, the lack of privacy and anonymity in cryptocurrency transactions have influenced more people to mix their cryptocurrency transactions in order to protect their privacy online. Therefore, it is imperative for the blockchain space to resolve the important issue that has plagued many people from meddling with cryptocurrencies.
Mass adoption is not a distant dream
In order to successfully achieve a global cryptocurrency adoption, Bitcoin, along with other cryptocurrencies will require to undergo a carefully constructed stable ecosystem that ensures price stability. Looking at the current state of Bitcoin and its inflated prices, it is only at best, a speculative asset that is a darling for investors. The original intent of Bitcoin and other pioneering cryptocurrencies are designed for ordinary, risk-averse individuals. The pseudonymous nature of Bitcoin and other top-ranked cryptocurrencies have also decreased their appeal as currencies for everyday transactions.
Although privacy-enhancing tools like Bitcoin mixers and privacy wallets are created for the purpose of protecting the personal information and financial activities of individuals, the ideal candidate for the mass market is a stable cryptocurrency with transparency, immutability and most importantly proper anonymity features in place, such that no one can trace anyone’s transaction with a Bitcoin address in the digitally connected world we are in today. A currency needs to grow with the people and not past them. This is what will eventually attract the mass market and will actually incentivise them to convert their daily transactions to cryptocurrency.