How Psychology Affects Consumers’ Use of Cryptocurrency
Along with a steep decline in the value of the most popular cryptocurrencies like Bitcoin, Litecoin, and ether, the hype surrounding them has died down considerably in recent months. Yet cryptocurrency remains the most innovative and potentially transformative form of digital money. It has the potential to move us towards an entirely cashless existence as consumers in the not-too-distant future.
But what about the present? To what extent have consumers adopted cryptocurrency as money, not as a speculative investment? What is its value to consumers? And how are the early adopters using it?
The blockchain technology behind cryptocurrency has been widely discussedand explained. So have the various risksassociated with owning cryptocurrency. These topics are beyond the scope of this post. Here, I want to specifically consider the influence of cryptocurrency on consumer behavior as of late 2018.
As a form of money, cryptocurrency has notable benefits for consumers
You may have heard news about cryptocurrency theft, like the bitcoins getting stolen from Apple’s founder Steve Wozniak. But there’s another side to the story. When compared with other forms of money, cryptocurrency has significant advantages. Because it is entirely digital, using it for making purchases incurs dramatically lower transaction costs, than, say, using a credit card or cash. If and when enough shoppers use cryptocurrency regularly, sellers may save 2%, 3%, or even more, and pass some of those cost savings on. What’s more, when using cryptocurrency, financial institutions are usually disintermediated or bypassed, increasing the user’s accountability and privacy, and reducing the likelihood of identity theft. ..Read More..