Global Data recently published a report called “Cryptocurrencies – Thematic Research,” which is presently breaking down the myths that they believe surround the crypto industry. Some of the main themes reference the expensive nature of these exchanges, along with their lack of speed and the few ways that they can be spent.
The study goes on for a total of 34 pages, coming at a terrible time for cryptocurrency when the market is suffering. Global Data was developed in 2006, and they do not believe that the future of cryptocurrency will ever reach the heights it hoped for.
According to Chief Analyst Gary Barnet,
“Many of the most basic claims made by proponents of cryptocurrencies simply are not true. We are told that cryptocurrencies speed transfers up, that they help to eliminate middlemen and that they are free of cost, but none of this is true.”
Barnett even comments that crypto transactions are anything but free. He said,
“For example, at its peak the per transaction cost for bitcoin exceeded $50, which is not exactly a great way to buy $25 worth of groceries. While the cost per transaction hovers around $1 when the bitcoin network is not under load, it will inevitably rise if transaction volumes grow again.”
Barnett constantly throws BTC under the buss, though he produces no solutions or alternatives for this problem. One of the biggest issues that the report states is that cryptocurrency lacks the same standing as currency.
Barnett notes that,
“no cryptocurrency is widely accepted and transacted. The number of retailers and businesses that accept cryptocurrencies as payment for goods and services is vanishingly small, and those that do typically report very low volumes of cryptocurrency transactions by comparison to other means of payment.”
Experts and enthusiasts have taken opposite sides in this debate, though there are many cryptocurrencies evolving with regulatory measures lately. Plus, merchant adoption is still relatively new. With the right advancements, Barnett’s predictions and statements will no longer be accurate.
As for scaling, platforms will need to offer bigger blocks that can account for better trading and transaction volume. These small changes, which require a lot of work for platforms, would end up resulting in fewer fees and less congestion in the marketplace, though that is only a theory.
However, the report specifically says,
“cryptocurrencies cannot scale. The Visa payment network is capable of supporting 24,000 transactions per second (tps) at peak rates and regularly averages in the region of 1,500 tps. Bitcoin, meanwhile, struggles to achieve a transaction rate over 10 tps, while bitcoin cash can handle around 60 tps. The only cryptocurrency which comes close to Visa’s average is Ripple, which is capable of 1,500 tps.”
Global Data is just one of the major analysis-based companies that is constantly evaluating what this technology can do for now and the futures.
Even though crypto has held some sort of value for a decade, Barnett states,
“cryptocurrencies represent a classic bubble, in which valuations are purely the result of speculation on the likely behavior of the market rather than a clear-eyed assessment of underlying value.”
The report concludes their annihilation of this industry by saying,
“In fairness, all currencies are a confidence trick. The US dollar, British pound, and the Euro all depend on nothing more than market confidence for their value. The extent to which a currency works effectively is a function of a range of factors and this report sets out to determine whether cryptocurrencies represent a serious alternative to the established fiat currencies.”