Crypto Mass Adoption With Polygon And Starbucks
Bitcoin’s whitepaper was published by Satoshi Nakamoto ten years ago. Cryptocurrencies are worth more than $850 billion, but they haven’t gained much mainstream acceptance. Over the years, cryptocurrency adoption has been increasing, and sudden price hikes in 2013, 2017 and 2021 did help raise awareness. But cryptocurrency has yet to reach its original goal, and it still has few practical applications. There are some major roadblocks that cryptocurrencies need to overcome as another year comes to an end. In this article we want to talk about the biggest obstacles crypto has to overcome and how Polygon and Starbucks are helping crypto getting mainstream.
China has taken a restrictive and hostile approach to cryptocurrencies, banning initial coin offerings (ICOs) in 2017 and clamping down on all cryptocurrency trading. The Chinese government has taken steps to discourage the use of cryptocurrencies in the country, as it prepares to launch its own digital currency. Western countries have been more hesitant in their approach to regulating digital currencies, with some regulators lacking the technical understanding to put in place suitable laws. In contrast, smaller countries like Malta have embraced cryptocurrencies and have been at the forefront of creating legal frameworks that support the crypto industry. The goal should be uniform regulation to reduce doubt and give cryptocurrencies more credibility
Fiat To Crypto On-Ramps
One of the biggest challenges facing the crypto industry is the process of converting fiat currency into cryptocurrencies and the other way around, known as the “on-ramp”. This process often involves dealing with regulated, centralized entities and undergoing AML and KYC checks, which can be off-putting for many people. Banks, which are wary of cryptocurrencies, have made it difficult for early innovators to bridge the gap between fiat and crypto and find reliable custody partners. These challenges have made it harder for the general public to access and use cryptocurrencies, hindering mass adoption.
Many people are unaware of how cryptocurrencies work and cannot distinguish between blockchain and cryptocurrency. The learning curve for crypto can be steep, and the abstract nature of the technology can make it difficult to understand. Fear of not understanding cryptocurrencies is a major barrier to entry for many people. There are more and more services coming up, that offer to onboard and educate new user. Some of them even provide free cryptocurrency in exchange for completing educational tasks and viewing educational content. More initiatives like this from major exchanges would be a positive step towards greater adoption of cryptocurrencies.
Most cryptocurrencies are still very volatile and considered high risk investments. Stablecoins can open access to the 1.7 billion unbanked and poor people and therefore bring in the masses. UST’s depeg was a disaster for stablecoins and has permanently shaken investor confidence. Nevertheless, stablecoins remain one of the most interesting categories in the crypto space and still have the possibility to attract many new users.
According to Investopedia, $9 million is lost each day to cryptocurrency scams. 2022 was one of the toughest years for the industry with hacks such as Ronin, Binance and FTX. This has led many people and businesses to view cryptocurrencies as being only suitable for criminals, terrorists, and money launderers. In order to gain wider acceptance, cryptocurrencies need to be seen as safe and have a governing authority that can handle issues related to digital cash. However, tracking and punishing wrongdoers in decentralized systems is difficult, and national governments are hesitant to openly discuss regulations for this reason. As a result, the benefits of blockchain technology are often overlooked.
Integration With Existing Products
Integrating cryptocurrency wallets into existing products can help to bring crypto into the mainstream. While companies like Robinhood, Revolut, Square, and others have added crypto functionality to their products, this is still limited. This is exactly where Starbucks comes into play. It recently rolled out the beta testing on its Polygon powered NFT rewards program. To finish this article let us have a look how it works and why it could be the catalyst that the crypto industry needs to achieve mass adoption.
Polygon And Starbucks
Starbucks has over 60 million customers per week and all of them are now potential users of blockchain technology.
The new reward program allows members to earn and buy NFT minted on the Polygon blockchain. They can participate in so called “Journeys” and once completed get rewarded with “Journey Stamps”, which are NFTs minted on MATIC as well as Odyssey points, that will unlock benefits and experiences.
And all of a sudden blockchain technology gets easy to access without the need of a wallet, technical understanding or even holding any coin.
This example shows perfectly how big traditional companies could partly run on crypto rails, how this would increase the network effect and onboard billions of users to blockchain technology.
Before mass adoption of cryptocurrencies can become a reality, two things need to happen. First, governments must create a supportive environment for cryptocurrencies. Second, user-friendly experiences must be developed so that people who are not technically-inclined can use cryptocurrencies, just as they use their phones, cars, and credit cards without necessarily understanding how they work.
Who We Are
Moonrock Capital is a Blockchain Advisory and Investment Firm, incubating and accelerating early stage startups since 2019.