articleStartImage

Cryptocurrencies seem like a very appealing asset class that you can purchase without intermediaries. Money is pouring in, but most of the buyers have had enough time to learn the ropes. But is the usage of cryptocoins user-friendly enough to guarantee a mass adoption?

Users get locked out of smartphones. Passwords are lost. Weak and repetitive passwords abound. General computer skill, backup habits, attention span- all of those may hinder a buyer. Even the first steps of downloading and using a wallet are not hassle-free. All of this and more may be slowing down the expansion of cryptocurrencies, limiting their influence only among a relatively small group of true believers, evangelists, and the occasional speculative investor.

Strange Addresses and QR Codes

So far, for all the work done, no one has invented a method to build a user-friendly address to send and receive coins. It's slightly unnerving to verify the receiving address. For larger sums, users are advised to test the address by first sending a small transaction- but this increases time and transaction fees.

Unforgiving Encryption

Make sure to encrypt a wallet with a difficult password. But write it down in at least three places. A wallet will not forgive errors. If you forget the password, you are locked out of your funds. And for users who routinely forget strong passwords and are used to asking for a renewed pass, this may come as a cruel surprise.

Seed phrases are another issue. There are cases where users ignore the warning to write down the phrase. So when your antivirus software decides it does not like your wallet and decides to destroy it, there is nothing you can do to generate it again and gain access to your coins.

Just Too Many Coins

So many cryptocoins and tokens- this looks like an invitation to build a portfolio to balance volatility and risk exposure. Not so fast, though. Just holding a few different coins requires a lot of attention. Some wallets already offer built-in portfolio features. But sometimes, coins just stay on an exchange wallet. Coin-wallet compatibility is also an issue, as coins may get lost if sent to the wrong wallet. So building a diversified portfolio of coins and tokens right now requires a lot of work and very little automation.

Exchanging between coins is also impossible. There are a handful of "ramp currencies," or relatively stable coins that form pairs. But not all pairs are available, and users would need to be familiar at least with a couple of the major coins, including Bitcoin, to make purchases.

Users Need to Do Their Homework

Users always need to track the technological development of the sector. Wallet versions, blockchain issues- the information is still not widely available. Sometimes, users resort to asking desperate questions on Quora, Reddit or StackExchange to get an issue resolved. Sometimes, exchanges and other companies work without adequate customer support, or just ignore issues. And every issue or mistake can be very expensive.

Sometimes, even receiving coins from an ICO may prove difficult or unnervingly slow. Sometimes, users receive little instruction on how to safely receive their tokens. And this just adds to the lack of a smooth experience.

It Does Not Look Like Banking

When you are dealing with money, you are used to the general layout and approach to online banking. But coins in a wallet look very little like a bank statement. Litecoin, for example, comes with six decimal units to represent fractions of the coin. And there is no user-friendly tool to calculate exchange and blockchain fees- you may have to eyeball the sum and do a calculation in your head or use a calculator. And sometimes, you may need to calculate fees by turning them into dollars, to get an idea of what the transaction would cost. Book-keeping is rather difficult when building a small portfolio.

For all of the above reasons, cryptocurrencies may take some time before reaching real mainstream status. Everyday use would indeed inject a lot of money into the market, but the above difficulties can stop a lot of the investors, and all but the most determined believers.

Endless Logins and Accounts

Just setting out to explore the world of cryptocurrencies may mean creating dozens of new accounts and registrations. There is still no one way to use your identity, and so a buyer or investor would need a few registrations. Some of them require elaborate verification. You would need a separate paper-based file, to keep track of all the logs and passwords, and not confuse them with wallet encryption passwords.

And then there is the whole issue of public and private keys. Both look exactly alike- a garbled string of numbers and letters. You have to keep it safe and never share it. This is basic knowledge, but users may easily get confused.

The Language of Cryptos

You will acquire an interesting new vocabulary, just to make heads or tails of what is happening. Are you buying a coin, an asset or a token? Is the consensus PoW or PoS? Is it Scrypt or SHA-256? Sounds like mystical language, and a lot of users may give up on cryptocurrencies just because the technological information is complex. And white papers? The best thing about them is the potential for price growth. Otherwise very few people would understand what is really important about a new project.

The world of cryptocurrencies is still new so that adoption may increase gradually. But despite the booming interest in 2017 and earlier years, there are still many technical and marketing hurdles to be overcome before mainstream users feel comfortable with blockchain apps and tokens.