‘Money is no object: Understanding the evolving cryptocurrency market’ is the title of the new 17-page report published by PricewaterhouseCoopers (PwC). The company which is one of the big four auditing firms in the world has been analyzing digital money and its impact in the financial industry for more than two years.
One of the key takeaways from their research is that it is no longer a question of if cryptocurrency will transform the financial sector, but when and how.
PwC identified the five major key players in the emerging market: merchants, tech developers, investors, financial institutions, regulators, and consumers. The firm carried out a survey to better understand the consumer perspective and claims that the most game-changing role will be played by the consumers.
[tweet_box design=”default”]Survey: 86% of respondents who have used cryptocurrencies in the last year expect their use of digital money to significantly increase in the next three years.[/tweet_box]
The report aims to educate people who are new in the cryptocurrency ecosystem, as well as share valuable information with those familiar with it. While talking about cryptocurrency, the report highlighted some of its key benefits: impervious to counterfeiting, rapid and irreversible transactions and the decentralized blockchain that provides security and transparency to the whole system.
Talking about the cryptocurrency phenomenon, PwC suggests that it’s not something that will fade away in the future, but will replace conventional markets with new technology-driven markets.
The report stated:
“Cryptocurrencies carry groundbreaking potential to allow consumers access to a global payment system — anywhere, anytime — in which participation is restricted only by access to technology, rather than by factors such as having a credit history or a bank account.”
Talking about the growth of the market, the document said that its development is currently heavily reliant on the venture capitalists that are investing in the technology and trying to make a profit out of the price fluctuations, mentioning this as one of major reasons for the volatility in the price. The report claimed that digital currency needs to evolve from the hands of the investors to the hands of the consumers and only then it will achieve stability.
Despite the many innovative applications the technology offers, it also has its fair share of cons. The market has faced some major challenges along the way, from the emergence of dark web-based sites that use digital money as the only payment option to the Mt. Gox crash.
The technology is also tempting for criminals, who exploit cryptocurrency’s key features. This has heavily impacted the price and the market reputation, while boosting volatility. However, the report did clarify that such examples do not represent the community as a whole and their impact will slowly diminish as the market matures.
The major role in this developing market will be played by the consumers and merchants, considering that Bitcoin offers consumers a cheaper and faster peer-to-peer (P2P) payment option when compared to the traditional services available. The main change will come when consumers have easy access to cryptocurrency, as well as the ability to quickly convert it to fiat currency. Adoption will also grow alongside the creation of offers that specially cater to consumers that pay using cryptocurrency.
Digital money represents a great opportunity for merchants, as it offers lower transaction fees while simultaneously removing the possibility of any chargebacks. However, the volatility of Bitcoin also represents a threat to the merchants, but this will eventually improve as the market grows.
The report ends with the possible prospects for the blockchain technology on which cryptocurrency is based. Recognizing the potential of blockchain, the report states:
“This technology has the potential to open the door to revolutionary possibilities in multiple industries. Escrow accounts, securities and financial instrument offerings, ‘smart contracts’, and electoral systems are just a few of the concepts that are being discussed.”
For more details, you can download the report from here.