Despite the growing popularity of cryptocurrencies and blockchain, the complexity of the technology might be making it hard for average users to understand
Despite cryptocurrencies and blockchain gaining popularity, the average person might find the technology too complex to understand, which adds a barrier to more people entering the space.
According to an August survey conducted by Australian crypto exchange Swyftx, 43% of 2,229 respondents said they hadn’t used the tech because they were unsure how it works.
Similar data from the 2023 Crypto Literacy Survey found that at least 28% of 3,000 respondents worldwide shared the same sentiment.
In 2023, the United Kingdom’s Finacial Conduct Authority (FCA) published a research note that found that at least 30% of 2,337 respondents listed a lack of understanding as a reason for not entering the space.
Lance Morginn, president of analytics and marketplace risk management firm Blockchain Intelligence Group, told Cointelegraph the crypto market “can scare people away with the plethora of unfamiliar terms.”
“On first impressions, it can appear too technical and irrelevant to traditional money. Words such as blockchain, tokens and technology can lead to a sense of intimidation, discouraging people from checking crypto out,” he said.
In its fifth annual Global Crypto Adoption Index report, blockchain intelligence firm Chainalysis stated that the launch of spot Bitcoin BTC $62,920 exchange-traded funds (ETF) in the United States in January was the root cause of a massive spike in crypto use throughout the year. Investors can now purchase and sell some types of ETF shares at market prices on stock exchanges without a high level of technical knowledge.
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Related: How ETFs are reshaping the crypto markets
According to Morginn, the industry should aim to coax users in with a focus on the easier aspects of crypto, rather than trying to wow them with jargon.
“The cryptocurrency industry must create simplified educational resources and user-friendly platforms to help the average user warm up to cryptocurrencies,” he said.
“As the industry addresses the complexity concerns head-on, cryptocurrencies and digital assets will reach a wider audience, encouraging more partnerships between financial institutions, service providers, and more users to have cryptocurrency holdings.”
No expertise with hardware can be a roadblock as well
Aside from not understanding how crypto and blockchain tech work, another barrier can be a lack of understanding around some of the hardware involved, such as how to safely store individual assets like Ether ETH $2,535 .
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Kadan Stadelmann, a blockchain developer, operations security expert, and Komodo Platform’s chief technology officer, told Cointelegraph that storage can be a minefield for some users.
“The industry could always use more education, especially free technical information for the unbanked,” he said.
According to Stadelmann, added technical complexity could also make “things less secure rather than more secure” because systems that are too complex for users risk making mistakes and losing their coins.
Related: Is onboarding too hard? Crypto adoption still faces major obstacles
“The lion’s share of digital asset holders do not have the tech expertise to employ highly complex storage strategies,” he said.
“A big risk of loss is storing your Bitcoin in too technical of a manner. Each individual must determine what is practical and secure,” Stadelmann added.
Chainalysis estimated that 17% to 23% of the overall Bitcoin supply might be lost through private key compromises, people using the wrong network to send, damaged wallets and more.
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Cryptocurrency can appear complex to the average person, often due to its association with advanced technology and sometimes complicated user interfaces, Alicia Kao, Managing director at crypto exchange KuCoin told Cointelegraph.
However, she says the industry is actively working toward a remedy for the issue, with a shift in focus from just catering to traders, and trying to reach the general population as well.
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“The key is to strike a balance - maintaining the innovative essence of cryptocurrency while making it more approachable,” Kao said.
While she says it’s an ongoing process, she thinks it’s crucial for the “widespread adoption and success of this revolutionary technology.”
Phillip Lord, president of crypto tap payment app Oobit, believes many people do view crypto as too complex, which has created roadblocks to mass adoption.
“For the average user, the intricate jargon, the need to grasp unfamiliar concepts like wallets, keys, and decentralized networks, and the fear of losing assets due to use error creates significant friction,” he told Cointelegraph.
A Feb. 22 survey report from key management network Web3Auth, which had 3,37
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