Scan the headlines over the past few weeks and cryptos, well beyond the marquee bitcoin, are making inroads into mainstream consumer and business activities.
It is the rule of thumb, when it comes to secular change, that very few innovations come along to rapidly change the state of payments themselves.
“Most things take 10 to 15 years to drive through the ecosystem,” McCarthy told Webster — especially when a range of stakeholders are involved, spanning two-sided markets, consumers, merchants and governments.
To get a sense of just how hard it is for cryptocurrencies to gain, well, currency in everyday life, consider bitcoin, perhaps the granddaddy of cryptocurrencies — and still the 900-pound gorilla in the space, with roughly two-thirds of the market cap across the entire sector.
Webster noted that bitcoin has been around for a decade, and while the conventional wisdom had been that the digital offering would be used far and wide as a payment transacting conduit, those predictions have been wildly off the mark.
Part of the reason bitcoin failed to live up to the anticipation, contended McCarthy, has been that the enthusiasm surrounding buying and holding (and speculating) with bitcoin as an asset class has focused on building hedges against other holdings (as gold has traditionally been used).
It was (and in some cases still is) this speculative wild west of digital coins that has held back cryptos from being tied more closely to commerce, said McCarthy. The mechanics and clumsiness of it all have not helped. The individual who yearned to spend fractional bitcoins on a cup of coffee was subject to slow transaction times and wild pricing swings that ratcheted up (or down) the value of the coin itself, and thus what that fraction might be worth.