In addition, the acceptance of non-volatile stablecoins has increased significantly. Whereas no stablecoins were in the top 20 examined cryptocurrencies of Z. Li et al. (2019), 5 out of the top 20 by market capitalization are stablecoins today. Additionally, the shift from PoW to PoS is in full swing, benefiting cryptocurrencies' ability to fulfill the requirements of a means of payment in terms of costs, speed, and throughput.
Giudici et al. (2020) mention that a critical development is the emergence of new exchanges where people can access cryptocurrencies. This trend is also observable by the sheer number of exchanges, with
Cryptocurrency companies also recently began with colossal marketing efforts to boost awareness.
As awareness and accessibility increase, the network effect takes place as more people invest, and in turn, more platforms are willing to sell and accept cryptocurrencies. Even neo-brokers such as Trade Republic or Robinhood, which initially specialized in stocks, now have cryptocurrencies for sale.
There is also an increase in the number of cryptocurrencies and users. The number of cryptocurrencies doubled within the last year (GP Bullhound et al., 2022), while the number of users has increased two-fold within the first half of 2021, according to Statista (2021).
In turn, knowledge of cryptocurrencies also grows.
With more attention, new challenges become evident. One of the biggest challenges cryptocurrencies are trying to solve today is scalability. As cryptocurrencies get more attention and users, transactions increase substantially, and some networks reach their capacity limit. This problem results in high transaction costs and low transaction speed, which is happening for the most popular cryptocurrencies,
Attachment strategies such as the proposed Lightning Network for
Additionally, with this change, ethereum.org (2022a) is also solving the problem of rising energy consumption and extensive mining equipment associated with the PoW mechanism.
© Prof. Dr. Isabell M. Welpe / Florian Knöchel