Discover key insights from Coincover’s research on cryptocurrency’s reputation challenges and solutions for boosting consumer confidence in the industry.
According to recent research released by Coincover, the blockchain protection business, the cryptocurrency industry is battling to enhance its reputation. ‘Securing the Future of Cryptocurrencies’ is a report based on a poll of 16,316 persons in nine countries. It concludes that security issues and volatility are the two biggest obstacles to the widespread adoption of cryptocurrencies.
The study examines the causes of crypto’s present reputation and draws on a thorough assessment of the literature as well as interviews with market specialists. It challenges this justification and offers suggestions for steps to boost consumer confidence and advance the crypto sector.
The study promotes the development of unofficial industry standards. This is in addition to tools that users can use to find suppliers who follow these requirements. It promotes a climate in which customers switch to these reputable providers.
Cryptocurrencies have enormous development potential
Ownership is expanding. Thirty percent of those polled said they were likely to invest in cryptocurrencies during the next 12 months, while 17% of respondents said they now held them. The most often used currency is Bitcoin (46%), followed by NFTs (18%) and Ethereum (17%).
Additionally, 55% of respondents indicated that they are at least somewhat interested in cryptocurrencies, with 11% saying they are actively involved or committed (strongly engaged in the market).
In terms of financial gains from holding cryptocurrency, 50% of respondents are satisfied with their results. In contrast, 20% of people are not happy with their returns.
Challenges to overcome
Consumer cynicism regarding cryptocurrencies is at 19%, while complete rejection of cryptocurrencies is at 25%. Additionally, among non-crypto users, crypto exchanges are the least dependable source of financial services. In fact, 30% of respondents claim they have no trust in them at all.
When asked about their opinions on a variety of technologies, consumers are most concerned about cryptocurrency, with 30% of them, ahead of artificial intelligence (AI), with 25% of them.
The reputation of the sector was harmed by FTX’s demise. Because of the incident, 20% of individuals are now more pessimistic about the market as a whole. Another 16% are being more selective in their supplier selection.
According to the Coincover study, potential advantages like financial innovation and privacy are less likely to be associated with cryptocurrencies than the perception that they facilitate criminal activity, financial fraud, and corporate crime. When asked what risks they are most concerned about, 52% of respondents said fraud, followed closely by 51% who said theft, including hacking. Only 54% of crypto asset owners are happy with their providers’ dedication to security.
Investment is also hampered by obstacles. The two main obstacles to investment, for both users and non-users, are price volatility and security worries. Losing keys or access is the third highest entrance obstacle for users, but complexity is the third biggest barrier for non-users.
The CEO and co-founder of Coincover, David Janczewski, thinks that despite the enormous potential of cryptocurrency, the market needs to address customer concerns. Since many people still view cryptocurrencies as a mystifying technology, the sector needs to demonstrate that it is making every effort to safeguard investors, increase consumer confidence, and lay stronger groundwork for the future.
Boosting self-assurance
Industry norms must be established. The industry must now create clear norms and codes of behavior that will serve to protect investors and stop additional reputational harm because regulation is going slowly.
Concerns about security also need to be addressed. By making investments in reliable blockchain protection, this can be accomplished. Consumer education regarding the dangers of investing in cryptocurrencies and ways to reduce exposure to these dangers is also crucial.
Additionally, efforts should be made to make cryptocurrency investing simpler by offering clear and comprehensive information.
Speeding up the revolution
The chief technical officer at Ledger, Charles Guillemet, states: “The crypto revolution needs two essential components to become widespread. Scalable infrastructures are the first, just as the Internet required rapid broadband to reach billions of users. Security comes in second. individuals shouldn’t take the chance of losing their assets as more individuals put their money, identities, or data in blockchains. That’s all there is to it. The cryptocurrency revolution won’t be able to reach hundreds of millions of people until these conditions are satisfied.
“The Industry can do more to protect users and lower risk,” claims Janczewski. Clear standards must be established, and best working practices must be followed. By doing this, we can lower security risks, avoid reputational harm, and foster user confidence. Organizations that uphold standards will be easily recognized and drive away unreliable firms.
“Self-regulation is something that we’ve been working on as a global industry for a long time to support government entities,” says Ian Taylor, head of crypto and digital assets at KPMG and board advisor at CryptoUK. Along with other worldwide standard-setters. These create the guidelines that are transmitted to specific competent authorities. That’s the first stage in developing codes of behavior for members and a set of regulations to guard against harm to customers in a new industry.
