Time and time again for the past 3 years people have said we need to make cryptocurrency easier for the masses. Its a topic I have thought long and hard about. Despite the claim, I just don't think its true.
In fact I argue there is no way to make it easier for the masses.
The only thing we can do is educate people about things.
In terms of education I honestly only think there are four things people need to be educated on - security, refunds, buying and selling.
There is a huge misconception in the cryptocurrency industry that people need to understand how cryptocurrency works and why it is more trustworthy than existing systems.
I do not agree with these thoughts.
No one cares how money works
The fact is very few people understand how fiat currency works and most people don't care. The only thing they care about is does it work - not how does it work.
Most people have no idea the process hat takes place when they use a credit or debit card. They don't understand the difference in purchasing power and volume.
They have no idea how interest rates after the actual value and purchasing power, they only know that it does affect them.
They have no idea what causes one currency to go up and another to go down when used on the forex markets.
They don't understand how the derivatives market affects fiat value. In fact most don't even know what the derivatives markets are.
They have no idea how rating systems affect values. They have no idea about how money is actually generated from fractional reserve bank lending.
The truth is cryptocurrency is very much like storing cash in your wallet or in your house.
If someone seals your wallet your money is gone. There is no getting it back. You can report the theft to your local police, but thats the extent of it. When its gone, its gone.
Equally if you have a house fire and all your cash was stored in your house - that money is burned up - you cant get it back.
Cryptocurrency is considerably less protected in this way. With a bank your money is insured and protected - with cryptocurrency his is not the case. In fact its a lot more like storing your money in PayPal instead of a bank - as money in PayPal is also not secured. If someone breaks into your PayPal account your money is gone and PayPal will not replace those funds.
For this reason, it is very very important to have backups of your wallet keys or seed phrases.
Some people believe the best option is to store their backups in safety deposit boxes - and this is a great solution for those who hold but don't often trade. However this is not really a viable option for those regularly trading currencies as they will constantly have new wallets - thus having new keys and new seed phrases often.
This also makes it so the only option for people like myself who follow the recommendation of Satoshi in never reusing a wallet address is to rely on seed words instead of wallet keys.
The truth is, there is no easy answer. For myself I use a multitude of methods. I have backup wallets stored on USB drives encrypted with pgp, I have hardware wallets such as trezor, I have my pgp keys, seed phrases, and wallet keys stored on paper and locked in a firebox safe, and I store my all my paper backups in a firebox safe that is kept by my children (I trust my children not to steal from me).
Even with all of this security however, if someone managed to put a virus on my computer and break into my cryptocurrency wallets, none of this matters. The moment the funds are moved from my wallet to a hackers wallet - my coins are just gone. There is no getting them back.
For years people have said that cryptocurrency insurance is needed for this very reason. This again is practical if you are merely holding however if you are frequently spending your crypto or trading your crypto this option doesn't make sense.
Obviously you can't get insurance for cryptocurrency when the amount of cryptocurrency you are holding can change often.
There are some companies that exist to provide cryptocurrency insurance such as cryptocoin swiss however no one really knows how trustworthy these companies are until and unless they need to file a claim.
For corporate style insurance there seem to be some options - for example coinbase has been FDIC insured in the US for up to 250,000 dollars per US account holder making them a very viable option for those located in the US, but this also comes with a cost.
I means you are trusting a third party company to hold your coins and it means its limited based on the location you live as coinbase does not provide global services. On top of this, no one really knows if they will replace funds in case of an account hack or theft of privacy keys.
No one knows if they will require you prove your account was hacked or if they will claim it was really just you.
Of course then enters into the equation of, do you really want a third party holding your coins. Isn't the entire point of cryptocurrency that you no longer have to reply on third parties companies that could potentially manipulate the values of your coins by doing things like fractional reserve banking at some point?
The truth is when it comes to cryptocurrency there is no great answer when it comes to security. It appears as if there will never be a great answer. Its a matter of do we want to trust third parties or do we not. If not we must manage our own security which will always come at a cost when things go wrong.
he next topic people need to learn about is that there are no refunds when making purchases with cryptocurrency. Despite any stores policy when using a credit card or debit card there are always options to get a refund.
A person can call their credit card company and dispute charges. People can claim there card was stolen. They can report a company as having scammed them.
When dealing with cryptocurrency this just isn't an option unless the business offers you a refund themselves. However even if they claim o offer refunds, there is no way to enforce this.
I saw his problem all the time when working with coinpayments and I see it all the time in blockonomics. People come searching for support expecting refunds after having been scammed.
Once again when dealing with cryptocurrency its like dealing with cash. If you hand cash to someone who claims to own a legit business and they run off with your cash, you can attempt to report them to the police. If you know who the person is you can file a court case against hem, but those are your only options.
If its an online business the person who scams you didn't likely use there real name and a website can easily be deleted, not reply o support requests, and use fake information to register the domain name.
Overall if you are scammed there is little you can do, your funds are just gone.
Many merchant accounts have review ratings for merchants that can be checked, however when checking review ratings one must be sure o read all the bad reviews and not merely trust the ratings.
Its very easy for a merchant who is running a scam to make hundreds of purchases from themselves using a multitude of accounts and leave themselves a good rating thus inflating an otherwise bad rating to appear to be trusted.
The only solution to this is if merchant providers themselves start offering refunds. However people in cryptocurrency tend to like to always remain in control over their funds. This means they will remove funds quickly if scamming which will cause the merchant provider to lose money.
Also there is always the option for scammers to directly accept payments through the blockchain without the need of a merchant provider. Unlike with credit cards, no special company is required to be able to accept payments.
In cryptocurrency a merchant account is used out of convenience no out of any true need. Anyone could just as easily create their own integrated system.
This is not the case with credit card processing where you need special approval from the credit card companies to accept credit cards.
This is where credit card processing company and companies like PayPal come in to play. If someone is running a scam with these kind of services, its easy for their accounts to be terminated thus blocking them from accepting payments.
Cryptocurrency has not such protections. It is up to each user to investigate a company before spending money with them. This is why so many people believe cryptocurrency adoption is so hard, because most people only trust major corporations when it comes to no being scammed.
Until more companies start accepting cryptocurrency, there is no real fix.
Buying and selling cryptocurrency
Buying and selling cryptocurrency is perhaps the most confusing topic. Countless people just avoid cryptocurrency because the process of buying and selling seems to be so difficult.
The truth is, the level of complexity involved very much depends on where you live.
If you use EUR or USD the process is so simple a 6 year old could be taught how its done. All one needs is a maser card or a credit card. One doesn't have to worry about the complexity of charts, buy and sell books, or any other types of things.
Companies like shapeshift and changelly make an interface that is so easy to understand, one would be hard pressed to say its complicated at all. The hard part is getting the masses to realize these types of sites exist that make it easy.
This is also why I keep mentioning in my articles about NEXT and to the NEXT Exchange team that they need a similar interface for those completely new to cryptocurrency. It's because so many are scared away from cryptocurrency by exchanges that more exchanges need to offer multiple interfaces and one specifically geared towards those that are completely new to cryptocurrency.
For people outside of the EU and US things are a lot more difficult because the masses of exchanges are not created for them.
There is no easy fix for this because it very much depends on the exchanges and the regulations of the countries people are from. Unfortunately this is also what causes a lo of scams.
People claim they live in countries where buying cryptocurrency is difficult so they seek to buy it over the counter from untrusted sources and they get scammed. Others seeking to help people from nations where buying cryptocurrency is difficult get scammed because they send crypto to an untrusted source and get scammed.
Until more countries are willing to work with cryptocurrency outside of the US and EU, this will remain a problem. Until more exchanges make very basic interfaces for accepting funds from people living in those countries this will also remain a problem.
This is one of those times, regulations could actually help adoption by making it clear they won't be arresting people for using cryptocurrency and working with banks on ways to allow cryptocurrency purchases without a fear of accounts being unjustly frozen or terminated.
Again, this is the only way.
Cryptocurrency itself is not hard to use. Its a matter of downloading an app and funding it with the currencies you want.
There are countless types of applications that exist for holding crypocurrency - everything from mobile apps to desktop apps to 3rd party web apps.
The problems that exist are all about educating the masses on how to use cryptocurrency in a secure manner, how to buy and sell cryptocurrency safely and easily, and educating them that when making purchases with cryptocurrency there are no refunds so people need o research companies before spending.
Everything else that relates to cryptocurrency is easy to understand from an end users perspective. Its just a matter of time before the tools are in place and the mainstream corporate retailers start accepting it.