Making a product purchase with cryptocurrency is problematic. And without process changes, cryptocurrency will never replace fiat currency.
People are speculating with crypto, not using it to buy products and services. New York-based blockchain researcher Chainalysis Inc. research shows that only 1.3% of economic transactions came from merchants in the first four months of 2019. This percentage is little changed over the prior two years.
Cryptocurrency systemic problems will keep crypto in the speculative realm. Problems include:
Crypto price volatility - Who would use crypto to pay their monthly wireless bill with a digital coin that could surge 50% in a matter of weeks? Furthermore, sellers and buyers have difficulty establishing "fair" prices. Product prices do not remain current when the underlying currency prices change frequently.
Crypto transaction processing times - The time to process a purchase payment is way too long. A case in point is when I bought a product online the other day that took almost 10 minutes to clear. This delayed the product delivery process start time until payment confirmation occurred. The vendor website told me to submit a support ticket if payment was not confirmed within 15 hours. What?!
High transaction fees - Crypto transactions include a user fee. The fee increases during periods of high crypto demand.
Trust Issues - Slow transaction processing and crypto scams may limit people's trust. Lack of trust may further delay transactional use cryptocurrency.
A 2018 report by the Bank for International Settlements discusses the limitations of cryptocurrency replacing conventional money. https://www.bis.org/publ/arpdf/ar2018e5.htm
If given a choice between using a credit card or cryptocurrency to make a purchase, I will choose a credit card first. But this is not to say I won't refuse any crypto sent my way. I will stash it in my digital piggy bank.
Nice to talk about those issues @glenpalo, as to volatility that can only be fixed with mass adoption, a stable number of transactions provides stability, so that is a bit of a catch 22, as to the transaction time and fee's, that is true for the likes of Bitcoin and Ethereum and other high value crypto's, Steem and all tokens based on that like CTP has free transactions in 3 seconds, though you do need to have Steempower to cover the RC needs for what you do, EOS has 0.5 seconds transactions in a similar way as Steem, but there are also other crypto's with vastly different ways to operate like HOLO who has a Holochain and operating with mutual credit, the way that Bitcoin operates is basically obsolete, just too bad the big investors have no idea what they invest in, that's why they go for BTC and not something that scales, is fast and without fee's, thanks for sharing, keep up your great work and stay awesome.
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Definitely catch 22. Also, most people do not understand how the crypto process works. As a result, they don't trust what they don't understand.
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Thanks @glenpalo, yeah people need to know how it all works, for example all these hacker attacks aginst crypto exchanges, none of them has hacked the blockchain just the exchanges themselves, stay awesome.
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