According to a study conducted by researchers at the Imperial College London, cryptocurrencies possess the potential of becoming a widely used method of payment years to come.
In their research report titled “Cryptocurrencies: Overcoming Barriers to Trust and Adoption” Imperial College London’s Professor William Knottenbelt and Imperial College Business School’s Dr. Zeynup Gurguc, argued that so far cryptocurrencies are already becoming valuable just like fiat currencies.
With these improvements according to Knottenbelt and Gurguc, it will be possible for cryptocurrencies to herald a new technological dawn with regards to expenditures.
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,” wrote Prof. Knottenbelt.
Blockchain and Cryptocurrency Initiatives
Imperial College, the winner of 14 noble prizes, has had a research center known as Center for Cryptocurrency Research and Engineering focusing on blockchain initiatives since September 2015. Knottenbelt has been serving as the director of the center since its inception.
Early last year digital assets software platform, Blockchain, partnered with Imperial College to unveil the Digital Asset Research Lab. The goal of the lab is to explore blockchain technology’s transformative potential.
Scalability and Design Improvements Needed
However, cryptocurrencies are yet to effectively serve as units of account or mediums of exchange. In order to satisfy the last two functions just like fiat currencies currently do, Bitcoin, as well as other cryptocurrencies, will be required to improve in core areas including design and scalability. At the moment, for instance, a big number of cryptocurrencies are built on blockchains which are not designed to handle high transaction volumes.
Additionally, cryptocurrencies will also have to adopt more user-friendly designs to make them useful by those who do not possess specialist knowledge of them. Price movements of cryptocurrencies will have to be stabilized and become less volatile if they are to be widely adopted. Having a standardized regulatory approach across the globe will also assist substantially.