Do you make all, or most, of your payments in cryptocurrency? How about your family, friends, and neighbors? Coworkers? The average person on the street?

This was a hypothetical. We already know the answer: a resounding "no".

As of the time of writing this article, it's been over 15 years since Bitcoin, the first cryptocurrency, launched. Yet, with a collective cryptocurrency market capitalization in the trillions, almost no one uses any form of it as their daily money. The first-ever use case for blockchain has so far eluded us.

So why has the mass adoption of crypto as currency failed up until this point? We think we know why. Let's break it down.

1: The Underlying Blockchains Don't Work

The biggest issues facing cryptocurrency's struggle with mass adoption today are actually at the blockchain level. Yes, the tech has come a long way, but in many ways it's still grossly insufficient for mainstream use without resorting to custodians (which entirely defeats the purpose of cryptocurrency).

Here are some of the major issues keeping use of cryptocurrencies relegated to a technical few.

Limited scale at the base layer

Shockingly few major cryptocurrencies have prioritized scaling the network at the base layer. While this is by no means an easy problem to solve, the fact that popular blockchains like Bitcoin and Ethereum have essentially given up on on-chain scaling means that the two overwhelmingly most prominent networks have no room to grow if tens of thousands, let alone millions, of users join.

Layer-two scaling approaches inherently either fragment the ecosystem, introduce undesirable trust assumptions, or push users to centralized, custodial platforms (or a mix of all three). Users want a simple, streamlined onboarding flow to networks that they understand, with attributes they were sold. A user sold on using Ethereum won't want to pick between a wide menu of mostly-centralized L2s, and a new Bitcoiner shouldn't have to trust a custodian in order to spend their funds.

We believe this experience is holding crypto adoption back.

Long confirmation times

Today, still, in 2024, many (if not most) crypto projects require waiting for inclusion into a block before considering a transaction final or secure. This means, at best, many seconds, but usually minutes, if not hours, before a payment is finalized. This is simply unacceptable.

Modern payment apps offer instant settlement, and no cryptocurrency that offers any inferior experience will gain lasting traction in the payments space.

High or inconsistent fees

As a result of the above, transaction fees for most blockchain networks are at best low only when few users are using the network. At worst, fees spike to astronomical levels, where only institutions or professional traders are able to benefit from using the network. Affordability is a must for any payments network, especially a new competitor in an entrenched space.

Even worse than high fees, unreliability at certain fee rates is a major adoption killer. If a user expects to pay $5 to send a payment, they can plan for it, and be satisfied, even though much cheaper fees are desired. However, if they expect to make a payment for $0.50, and it could end up costing them anywhere from $1 to $100, they're much more likely to simply seek out more reliable payment methods.

Poor user privacy

Most modern cryptocurrencies have completely transparent blockchains. This means that all of the user's transactions are exposed for everyone to see. Pseudonymity (where users' identities are not necessarily tied to their blockchain activity) offers some protection, but it's just not enough. All it takes is a single point of linkage and a user's entire financial history is a matter of public record.

Thankfully, there exist quite a few advanced privacy functionalities in cryptocurrency today, however as a consequence of how early the technology still is, user experience for modern privacy functions is not yet smooth enough for the masses. Latency is high, addresses are far too long, and it can be easy to make a mistake and hurt your ability to recover your funds in case of a lost wallet. Privacy is also not widely supported throughout cryptocurrency apps and services.

Insufficient value stabilization

Cryptocurrency is quite simply too volatile for the average person to use as money. Yes, this is an economic problem from too little (so far) regular non-speculative usage, but it's also a technical one. Many cryptocurrencies have a single token which acts as a utility token for the network, an investment token for speculative traders, and a financial token. Often, these three use cases conflict, particularly in the case of speculation causing wide price swings, and end-user utility as a money and payments network suffers.

Additionally, most accounting systems around the world use fiat currency units of account, such as the dollar or euro. Paying in any other unit of account significantly complicates accounting.

Several stablecoin projects exist to address this problem, however they usually fall into two main categories: centralized and decentralized. Centralized stablecoins carry many similar risks to custodians and the banking system, and additionally face regulatory uncertainty. Decentralized stablecoins have yet to be sufficiently proven, with many major implementations suffering catastrophic depegging incidents.

Bad and confusing user experience

Probably the worst sin by modern cryptocurrency networks is the user experience. Beyond the problems of slow confirmations and high or inconsistent fees, interacting with base crypto protocols is a highly technical and confusing experience. Users must juggle non-intuitive and long addresses, handle difficult and easy to misplace backups to avoid losing funds, and conduct most of the communications surrounding payments on separate platforms.

Few systems exist to abstract the complexity of using cryptocurrency without resorting to custodial systems, and those that do have an incomplete experience and poor adoption.

2: End-User Apps Aren't User-Focused

Beyond base protocol deficiencies, most apps and services built on top of cryptocurrency networks don't do the end user any favors. The apps and tools most users have to deal with are insufficient for mass adoption.

Most wallets and services cater to traders

Far and away, the number one most common user type in cryptocurrency is an investor or speculative trader. The apps available reflect this. Portfolios, profit-and-loss, buying and swapping tools, etc. are common, while realistically usable tools for spending and using as money just aren't there.

This makes sense: developers build where the money is. There's a lot of money facilitating speculative trading and investing. There is very little per-user profit to be gained from using crypto as money, which then becomes a self-fulfilling prophecy of the money and the users going away from payments.

Technical details aren't abstracted away

Too many wallets and services haven't found a good way to present the cryptocurrency experience in a way that most users understand. Sync times, blockchain confirmations, different addresses and address types, smart contract and token details, privacy and other special functions, etc. aren't presented in a commonsense way for average non-technical users.

Insufficient accounting tools

The blockchain itself only communicates the barest possible accounting details, which are insufficient for realistic use as money. Outside of data functions which include encrypted transaction data, the responsibility to provide accounting tools resides on app developers, and so far they are grossly insufficient for a frequent payments context.

In particular, tax laws make detailed transaction tracking an absolute necessity for most users around the world. Unfortunately, very few wallets have even a basic .CSV export function, let alone any more purpose-built accounting software integrations.

Most wallets don't support special features

As a consequence of the first problem of a trader-focused ecosystem, most multi-asset wallets support the different blockchains in the barest and simplest way possible. The special features of particular crypto networks, particularly privacy and instant transactions, just aren't supported by most wallets. This gives a much worse experience for the end user than otherwise would be available to them by the underlying network.

Single-coin wallets do tend to have much more feature-rich support, but can struggle to find wide usage due to the siloed nature of their ecosystems.

Honestly, most apps just have bad UX

Finally, most crypto apps just have a bad user experience. Simple functions like how to send or receive funds are not made obvious or easy to access, with many steps between the user and what they want to do. Crypto users largely put up with these experiences because they have no alternatives, however regular users of much better-designed legacy payment apps will not want to cross over to the blockchain world while the experiences are just so bad.

3: The Ecosystem Isn't Built Out Yet

Finally, the actual economic ecosystem around cryptocurrency and blockchain-based payments is still significantly underdeveloped. Even if a user had all the technical tools for a beautiful payment experience, there simply aren't enough easy ways for them to actually pay with crypto on a consistent basis.

Basic merchant tools just aren't there

The apps and tools required to efficiently accept cryptocurrency payments aren't there yet. The situation is even worse than for wallets, with almost no efficient and reliable payment gateways available for businesses to accept crypto payments. There are few tools in existence that would allow an average merchant to accept a variety of cryptocurrencies in a way that's easy to understand for an average cashier, and in a way with little enough friction as to be workable in a real-life, physical, point-of-sale environment.

Even the best of these has a crucial failing: they aren't integrated directly into the legacy merchant software that businesses already use. Accepting cryptocurrency almost always necessitates at a minimum installing a completely separate app, and sometimes having a completely separate device altogether.

Top-to-bottom ecosystems aren't built

What little crypto adoption that exists is inconsistent. You can pay for something with crypto, but not everything. You can buy it, but you can't earn it. And so on.

Users need a choice of options that allow them to buy or earn cryptocurrency, pay their bills, buy groceries, pay for transit, invest, borrow and lend, and so on. The entirety of the modern human financial experience should be possible, and feasible, with any cryptocurrency that is geared towards a money use case.

Adoption and services are heavily siloed

Among the ecosystems that exist that do provide a way to use crypto as money, most are relegated to single-coin silos. Many communities have achieved decent functionality and adoption gains, however they remain restricted to that one project.

In an industry which relies heavily on network effects, the utility of each cryptocurrency is fragmented to a point where almost none are base-level useful as a replacement for fiat money. And, as a consequence, there's little financial incentive to maintain robust services if they can only count a single coin's community as customers.

Yes, at the end of the day, a crypto project can derive immense value from being the only option for certain utility. However, there are hundreds of steps before hegemony is feasible, and most projects skip the first step of having a functional customer base in pursuit of immediate world domination. The results haven't been good.

Bad information about where and how you can use crypto

And finally, as a consequence of the above, there's very poor available information on how to even use cryptocurrency as money. In particular, a reliable directory of all crypto-accepting merchants in the world simply doesn't exist. The resources that do exist are extremely inaccurate, incomplete, and not very useful to the end user.

Largely, if you want to learn how to live on crypto, you're on your own.

Solutions

Thankfully, we at Dash have recognized the above problems, and for the past ten-plus years, we've been tirelessly worked at addressing them. Much work still lies ahead, and we likely have another 5-10 years before we reach mass adoption, but we've made good progress at tackling this daunting list of problems, and in a manner that's secure, permissionless, and decentralized. Here's how we've done so far.

What we've fixed

Dash has put in a lot of work solving the many technical problems keeping the cryptocurrency experience poor. To begin with, we pioneered the masternode system of incentivized nodes that provide special functions. This has been the backbone of all Dash's features, and allowed us to offer universal instantly-settled payments, as well as unparalleled blockchain security. Having a built-in, incentivized network of nodes also allowed us to be much more confident with a path for mass on-chain scaling, and we commissioned university research to prove this was possible explicitly with the Dash network.

A key concern preventing many projects from feeling comfortable with scaling massively at the base layer is the ability to affordably run a node, to prevent centralized actors from becoming gatekeepers to access the network. With the launch of the Evolution platform we now have DAPI, the decentralized API, which allows users and developers to access the network without running their own node, or trusting an external company to do so on their behalf.

One of Dash's very first features was a built-in privacy function, and we have maintained and worked on this since the early years. It is now available for easy use in both mobile and desktop wallets.

The main benefit of the Evolution release is the introduction of DPNS (Dash Platform Name Serve) and DashPay, two data contracts which, when combined, provide network-level usernames and contact lists. We now are able to offer an easy and intuitive payment experience to our users at the blockchain level, without relying on third parties to fulfill the data transmission needs necessary for commerce. And, rather than leave beautiful user experiences to external developers, we have prioritized a good experience in our wallets, which remain some of the best and easiest to use in crypto.

We have also prioritized a top-to-bottom financial ecosystem. It's feasible to live entirely off of Dash in much of the world thanks to our bill pay partners: Spritz for the US, Swapin for Europe, Bitrefill for El Salvador, and Unalivio for Venezuela, with many others on the way. You can also use Bitrefill and PayWithMoon to make regular purchases just about everywhere, while maintaining your privacy.

We've also built out a network of merchant tool partners: Bitrequest for any merchant, no matter what size or location, to accept Dash through a noncustodial, open-source, extremely easy to set up solution. For businesses seeking a more professional solution, CurPay, IVPAY, NOWPayments, and many others can suit those needs. And, we're always working on growing our network of merchant service providers. Feel free to reach out to us if you want to work together.

What we're working on

However, our work isn't done, and there are still improvements we can do before we fully solve all the problems facing crypto adoption that we outlined above.

Privacy, one area where Dash was a pioneer in the early days, has come a long way. We believe we can improve and update Dash's privacy function (and we are actively working towards this), but more importantly, we can significantly streamline the user experience. One benefit of our username and contact list setup is that it acts as stealth addresses, improving user privacy by keeping payment addresses from public view.

We are also working on getting stablecoins on Dash. Users seeking to avoid volatility and extra accounting hurdles will be able to transact in fiat currency values using Dash rails. For the moment, we are focusing on adding existing trusted stablecoins to Dash to provide the maximum utility for our users as soon as possible. Decentralized stablecoins will follow.

We're also working on importing our username and contact list setup into as many different wallets and service providers as possible, including for multi-coin apps. The end goal is to get as much of the cryptocurrency world as possible using the Dash network, rather than centralized infrastructure, for its social layer, for payments and beyond.

We are also in the process of integrating many of our partners into the wallet directly, so that users can conceivably download only one app and live entirely off of Dash. A big part of this is growing out our merchant map by integrating reliable data sources that keep the directory populated with the most accurate and up-to-date data. Finally, we're working on integrating DEX and other swap services into the wallet to allow inbound and outbound transactions from and to other cryptocurrencies.

We're very close to providing a complete, one-app experience where anyone can download the Dash wallet and use it to live completely off of Dash: buy, earn, spend anywhere, including where Dash isn't explicitly accept, all as seamlessly as possible.

What's next to tackle

Looking forward, we still have work to do in the long-term to make the perfect digital money experience.

An obvious step in the future is smart contract functionality. This not only significantly boosts the potential functionality of our data contract platform, but it also allows for improving our payment experience as well. A big part of this will be more easily integrating decentralized stablecoins using either an over-collateralized or algorithmic design, enabling users to store and transfer their value and avoid volatility while also avoiding the inherent risks of trusting centralized issuers. Smart contracts also bring in the possibility to more easily deploy functionalities such as advanced privacy without further modifying the protocol.

We also look forward to seeing as many as possible of the essential tools we rely on for commerce to be transformed from centralized legacy infrastructure to running on the Evolution platform. This can include the merchant map, accounting tools, and much more.

Finally, we would love to see Dash integrated as deeply into the current global economy as possible. This means integrations into legacy merchant software, either directly or through our many merchant tool partners achieving direct integrations. A user should be able to use Dash as freely as they use any legacy form of payment, without having to leverage special apps and services like they do today. That is the end game of digital cash.

There are many barriers between cryptocurrency as it stands today and mass adoption as a form of payment and money. We believe that Dash has the best chance at blazing this trail and becoming the first to be widely used, and useful as money. If you'd like to join us on this journey and be one of the first to live entirely off of decentralized money, we'd be happy to have you.

Joël Valenzuela (@thedessertlinux) is the head of business development and marketing for Dash.

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