Cryptocurrencies are fast becoming the mainstream as consumers clamour to get in with the trend kicked off by Bitcoin.
But with the industry drawing comparisons to the wild west and uncertainty regarding market regulation; the public is at risk of losing out if they don’t take time to research, say experts.
Last week several British banks, including Lloyds and Halifax Bank of Scotland, put stops on credit card crypto purchases leaving many customers unsure about how to buy and where to make safe transactions.
Meanwhile UK customers were recently prevented from buying into the crypto markets in their entirety after German firm Commerzbank put a block on the popular Coinbase exchange.
That resulted in Nationwide customers having a stop on transferring funds due to the SEPA transfer process that it partnered with the German bank on.
David Merry, CEO of Investoo Group, a leading London based fin tech company which owns digital brands that provide market intelligence to clients, says customers were forced to wait for weeks for refunds after transactions were approved in the UK before being stopped via the European network.
He said: “There was a lot of anger out there. Many Nationwide customers had paid a lot of money to buy currencies from the Coinbase exchange and had to wait weeks for refunds.
“Traditional banking is not up to speed with the pace of the crypto markets.
“And while there’s lots of chatter about a bubble, the reality is the market is actually quite small.
“You can draw a scale comparison by looking at the market capital of the FTSE 100, and it completely dwarfs it.
“Last month the FTSE 100 was worth £2.054 trillion alone while the crypto market averaged out around the $500 billion mark.
“Banks are still warming to the idea of how blockchain will work on a grand scale, but there’s no stopping this technology, no matter what the naysayers say, it’s here to stay and it won’t be long until it is in everyday use for everyone.”
Fifty years ago, Barclays and Westminster banks were the first to give customers access to their cash via ATM machines.
What is an every day convenience for customers now, was in fact revolutionary back then with automated access to cash helping to change the way the world dealt with money.
Nowadays, some of the world’s leading consumer brands are looking into how customers can purchase goods direct via the digital currency marketplace rather than relying on ‘fiat’ currency transactions like pounds, dollars and euros.
Mr Merry added: “At the moment it’s still very early days, some retailers are accepting crypto transactions but it’s far from mainstream.
“For example, coffee shops and even tattoo parlors are experimenting with payments while larger companies like McDonalds and Amazon are investigating the potential.
“While it’s not totally widespread in the UK yet, in places like Japan and the USA there’s more choice.
“Getting to the stage where you can simply go into a shop and use your crypto wallet in exchange for products and services will happen and when it does, money will be changed forever.
“It took almost 30 years after the invention of the ATM for debit cards to come into everyday use.
“But with crypto wallets it will be different. In as little as five years’ time, digital currency and smart contracts will have revolutionised the world.”
While the technology is rapidly advancing, the speed of the public’s uptake isn’t quite matched to the same extent.
Investoo Group recently revealed the results of a poll which was published by their news site Coinlist.me which showed British attitudes to cryptocurrencies.
The results provided an interesting snapshot on how the public view the market and in fact shows that uptake is more prevalent with young people.
Indeed, it showed that 18 to 24 year-olds are four times more likely to invest in the market than their parents or the over 55s, which indicates that the future is very bright as tech savvy youngsters warm to the idea of the easy use of the instrument.
The poll also identified that students are the group most likely to invest in crypto currencies like Bitcoin in Britain with 25% of full time students say they would happily get involved.
By far the most popular investment for students is property with 42% of those asked saying it was attractive while stocks and shares came in at 27%.
But 42% admit a lack of understanding on how to buy crypto currencies is putting them off while 42% cited perceived security risks as the reason for not splashing the cash.
Conversely 88 per cent of respondents to the You Gov poll said they are unlikely to invest in the crypto currency markets this year despite more than a trillion dollars of global assets expected to flood into the sector in 2018.
Scott Ryder of brokerage site CryptoGo.com says that far from market dominator Bitcoin being the most sought-after currency – Ripple is the one with the most buzz.
Ripple is a real-time gross settlement system, currency exchange and remittance network created by the company of the same name.
It is able to process 1,500 transactions per second and has been updated to be able to scale to Visa levels of 50,000 transactions per second.
“At the moment most people are interested in Ripple,” said Mr Ryder.
“They see this has the most opportunity in terms of returns due to its business being tangible and being adopted by all the largest banks.
“Ripple, which has been around since 2012, are signing up with institutions and financial institutions left right and centre, if a bank can’t process a payment as fast as the bank next door then they are going to lose business.
“This is creating a domino effect for all the banks to be able to process speeds as fast as each other.”
While it’s certainly true that there’s some way to go before the concept hits lightning speed, what’s fundamentally evident is that cryptocurrencies are here to stay amid the negative noise.