Bitcoin and other cryptocurrencies are the logical “next step” for money and are close to becoming a mainstream form of payment, according to a new study.
According to a study conducted by researchers at the Imperial College London, cryptocurrencies possess the potential of becoming a widely used form of payment within the coming decade.
This is because these two cryptocurrencies have passed one of three tests to become a universally recognized currency. They both act as a store of value, passing the first test. Additionally, if the current rate of growth continues, both bitcoin and ether could soon pass the remaining two tests. The study predicts that within a decade people will be using bitcoin to make regular purchases.
The study was commissioned by the eToro exchange, who have not been hesitant in cryptocurrency adoption. Professor Knottenbelt of Imperial College London said,
“There’s a lot of scepticism over cryptocurrencies and how they could ever become a day-to-day payment system used by the man on the street. In this research we show that cryptocurrencies have already made significant headway towards fulfilling the criteria for becoming a widely accepted method of payment.”
Dr. Zeynep Gurguc from Imperial College London made the point that the concept of money is evolving, and we have quickly moved from cash to card to contactless payment. The next natural step is a wide use of cryptocurrencies along with cryptocurrency based assets. he said,
“New payment systems (or asset classes) do not emerge overnight but it is worth noting that the concept of money has evolved – even in our lifetime – from cash to digital or contactless payments. The wider use of cryptocurrencies and crypto-assets is the next natural step”
Considering each evolutionary iteration of money has made the process of paying for something easier, the research paper concludes that the underlying technology of cryptocurrencies make them the next natural step towards reducing the friction of payments.
The researchers from Imperial College, also noted that every time money evolved, say from cowrie shells and other objects of value to coins and notes, there has been a reduction in payments friction. Per the researchers, cryptocurrencies could serve to reduce payments friction in the global economy.
“The world of cryptocurrency is evolving as rapidly as the considerable collection of confusing terminology that accompanies it. These decentralised technologies have the potential to upend everything we thought we knew about the nature of financial systems and financial assets,”
The study is very bullish news for the cryptocurrency industry, as the Imperial College of London is highly regarded. Since the start of 2018, there have been a wide variety of cryptocurrency based assets adopted by financial providers. There has also been regulatory acceptance from various jurisdictions.
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