While Silicon Valley remains enthusiastic about cryptocurrency technology, including Bitcoin and blockchain based technology, and the financial industry is sauntering cautiously into the room, the general public has shown little interest in “disrupting” money.
Part of the challenge is that cryptocurrency is solving problems that people don’t really care about. Case in point, Gallup released a poll indicating little interest in “digital wallets” of any kind, let alone Bitcoin wallets. The headline is brutally clear, “Digital Wallets Don’t Deliver What Consumers Need”. Aside from not trusting digital phones and phone companies (a well deserved distrust, in my opinion), digital wallets do no better than tie compared when other technologies for convenience.
It doesn’t help that Bitcoin is increasingly identified with scams, illegal online gambling, online drug sales, and, on the front page of the Sunday New York Times, Nathaniel Popper (author of “Digital Gold“) reports “For Ransom, Bitcoin Replaces the Bag of Bills”. Ouch.
It is true that all these criminal activities existed without Bitcoin, but the fact is that cryptocurrency is absolutely ideal for illicit commerce—it was designed to be so. And the Internet makes us all one neighborhood, so there is no “safe part of town” where crime is limited to “those people”.
To date, the damage has been relatively limited, not least because Bitcoin itself isn’t terribly useful. There isn’t much you can do with Bitcoin, so you need to buy stuff or convert to other “real world” assets, which requires entering into conventional systems. The police operate in this “real world”, and identities are uncloaked, so there are arrests, lawsuits, and shutdowns.
In this light, it is obvious why there is increased interest in government and bank operated cryptocurrencies. These alternatives offer the possibility of getting many of the benefits of cryptocurrency, with far less of the wild west stuff we don’t want. Furthermore, I expect people may trust digital currency that is backed by their insured baking system, more that something backed by unknown “guys on the Internet”.
Note: See also Coindesk reports on these issues over the past month and, I’m sure, continuing.