How Exchanges Are Raising the Barriers to Mass Crypto Adoption

Guest Author blog September 18, 2019
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How Exchanges Are Raising the Barriers to Mass Crypto Adoption

There are plenty of reasons why people get into the cryptocurrency space. Those with a technical understanding of ASICs or FPGAs become miners, lured in by the prospect of making free cryptos. Some join to speculate actively on various types of digital assets, trading long or short term in an attempt to turn a profit.  Many are just casually interested, having bought a little BTC or ETH to try and diversify their traditional portfolio.

Among all these, many people fall somewhere between the boundary of the second two groups. They’re the kind of casual speculators who may purchase one or two altcoins once they’ve grasped the basics of crypto and all the associated jargon. There aren’t many hard stats, but evidence suggests that most users will be private buy-and-hold types.

Catering to the Minority

As things stand, the crypto space doesn’t service the majority group in the best way. Most people come into the crypto space through the fiat-to-crypto exchange gateways like Coinbase. Then if they want to diversify, they have to turn to Binance or one of the other major crypto-to-crypto exchanges.

Considering the goal of most people in the cryptocurrency space is to foster adoption, this entire process is unnecessarily complicated, with too many barriers to adoption. To buy an altcoin using the steps described above involves multiple account registrations and KYC checks. The user also has to pay out trading fees to the different exchanges.

If they leave the funds on the exchange, they risk falling prey to hackers, or even worse, scammy exchange operators like those behind Canadian exchange QuadrigaCX or more recently, PlusToken.

Exchanges tend to be set up to favor regular, active traders, not the everyday investor who’s just hoping for a little passive income from appreciating cryptocurrencies. Exchange user interfaces are filled with candlestick charts and technical analysis tools. Great – if your day job is trading cryptos, but they mean nothing to the average Joe. Exchange tokens offer a means of reducing fees, but the benefits generally only kick in for those making large and frequent transactions.

All in all, the long tail of casual crypto users is left to navigate an exchange system that favors a small group of regular traders.

It’s hardly surprising that the exchange sector has evolved in this way. After all, exchanges profit from transaction fees. Therefore, it’s only natural that they want to attract traders who’ll put a ton of money through their service each day, even if these traders are the minority of users. But it doesn’t help the majority of people who face barriers to entering the cryptocurrency space.

Another Way

Thankfully at this point in the evolution of cryptocurrency, there are those in the space that now recognize there’s a gap in the market. For instance, ChangeNOW offers a solution that deals with the exchanges on a user’s behalf.

They’ve created a clean and simple user interface where you only have to enter the value and currency you want to swap. The service is non-custodial, so there are none of the hacking risks associated with leaving cryptocurrencies on an exchange account. Users will need to provide a wallet address; however, ChangeNOW is integrated with many major hardware and software wallets, including Ledger, Trezor, Edge, Atomic, and others.

There is no registration or account creation required. The service uses various exchange partners, meaning it will find the best rate for your chosen swap. Even better, the rate you see is the rate you get with all the platforms interest included, so there are no hidden charges.

Knowing the Audience

Of course, exchanges still have their place. Active traders need all the charts and analytics to ensure they can turn a profit and can benefit from the discounts offered by exchange tokens.

However, at this point in 2019, exchange services like ChangeNOW provide a much-needed solution for newcomers to the space.  The majority of users don’t want to trade, but simply buy and HODL. If the adoption of cryptocurrencies is the goal, then we need more companies to step up to the challenge and lower the barriers to entry for the long tail of casual crypto investors.

 

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How Exchanges Are Raising the Barriers to Mass Crypto Adoption
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