The factors driving the adoption of cryptocurrencies payments identified by the academic community are manifold. Volatility, Transaction Cost, and Security are the most frequently mentioned factors.
The interview rating shows the importance of each factor relative to the other factors for adoption, as rated by the respondents.
The ranking coefficient indicates the importance of the factor used in the Cryptocurrency Ranking. Since none of the sources compare all the factors listed in the table below, the ranking score is based to a greater extent on the respondents' answers.
For example, ten sources mention the factor Security, but it only has a coefficient of 1, as the respondents unanimously rank this factor as less important than the others.
| Factor | Sources | Interview Score M | Interview Score Mdn | Ranking Coefficient |
|---|---|---|---|---|
Volatility | 15 | 1.67 | 1 | 2 |
Transaction Cost | 11 | 2.00 | 2 | 2 |
Security | 10 | 1.00 | 1 | 1 |
Transaction Speed | 8 | 2.00 | 2 | 2 |
Accepting Venues | 8 | 2.67 | 3 | 2* |
Usability | 8 | 2.67 | 3 | 2* |
Trust | 7 | 2.33 | 3 | |
Knowledge | 7 | 2.00 | 2 | |
Regulations | 6 | 2.33 | 2 | |
Availability | 4 | 2.67 | 3 | 3 |
Decentralization | 3 | 0.67 | 1 | 1 |
Throughput | 2 | 1.67 | 2 | 2 |
Supporters | 2 | 0.67 | 0 | 0 |
Current Success | 2 | 1.00 | 1 | 1 |
Sustainability | 0 | 1.00 | 1 | 1 |
Trust, Knowledge, and Regulations
The scientific community often mentions Trust, Knowledge and Regulations and they receive high scores in the interviews.
As shown in existing problems, users’ trust and knowledge are crucial.
BTC is now a legal tender, might play a key role in the adoption.Users’ Environment
According to one interviewee, the users’ environment plays a significant role in the adaption.
This can be seen in high inflationary countries like Venezuela or Turkey, where the adaption is high and tied to the population's Knowledge. Moreover, stablecoins are more useful in these countries as they are less volatile than the country’s FIAT currency.
Insights from Literature
Volatility undermines two basic functions of money (Ammous, 2018) and poses a significant exchange rate risk for consumers and wholesalers (PWC, 2015). Moreover, if volatility is excessively high compared to currencies such as the dollar, cryptocurrencies will not be widely accepted (Hairudin et al., 2020).
Kwaasteniet (2018) sees security as the most crucial factor, as it induces consumer trust in the system.
Transaction costs lower than those imposed by traditional payment systems are significant for businesses to accept cryptocurrencies (Alzahrani & Daim, 2019a). Baur et al. (2015) also found that this aspect was central and pivotal to all study people.
To be adopted as a form of payment, the transaction speed needs to match or be close to banks or credit card providers (Hairudin et al., 2020).
Luther and Olson (2013) also relate this factor to the network effect, which favors the status quo. They state that businesses are reluctant to accept cryptocurrencies because of the small number of users, and users are reluctant because of the low number of accepting venues. Hairudin et al. (2020) add that if the number of users has reached a critical mass, the number of accepting venues will thrive too.
Steinmetz et al. (2021) see trust as a significant driver in the initial purchase decision, while Arli et al. (2021) exhibit trust as a direct factor for adoption influenced by factors such as transaction costs and security.
People need to be educated about cryptocurrencies and their underlying technology to increase general adoption (Steinmetz et al., 2021). The findings of Steinmetz et al. (2021) indicate that people with knowledge are also more likely to be users.
Wallets are one of the focal parts influencing the usability of cryptocurrencies (Baur et al., 2015; Krombholz et al., 2016; Kwaasteniet, 2018; Marella et al., 2020). Especially the availability of mobile wallets is an essential aspect of the usability of a cryptocurrency (Kwaasteniet, 2018). In addition, Arli et al. (2021) observed that purchasing cryptocurrencies involves a degree of complexity as consumers are unfamiliar with exchanges and wallets, hampering ease of use. Furthermore, ease of use is one of the pillars of the Technology Acceptance Model.
Farell (2015) asserts that the legal statuses need to be established for cryptocurrencies to be sustainable, but the current regulatory measures are still at the beginning and continue to evolve. Marella et al. (2020) also note that regulations would make cryptocurrencies more reliable, while Titov et al. (2021) suggest increasing state acceptance and regulation reduces volatility.
Availability or accessibility is also a determinant, meaning the number of access points users can buy or exchange a particular cryptocurrency, including the associated conveniences (Baur et al., 2015; Giudici et al., 2020; Kwaasteniet, 2018; PWC, 2015).
Decentralization of a cryptocurrency is also a factor for adoption as it positively influences security (Kwaasteniet, 2018) and creates trust (Arli et al., 2021; Marella et al., 2020).
According to the European Central Bank (2021), a throughput of at least 10,000 TPS would be necessary to process every payment in the euro area.
Farell (2015) sees the current success as a factor driving adoption, which can be quantified through the market cap, the estimated number of users, and the transaction volume. Alzahrani and Daim (2019a) recognize these metrics as indicators for the current adoption and acceptance level.
Other Factors
Some factors for adoption are either not frequently mentioned or have contradicting findings in the scientific community and are therefore omitted from further investigation.
Influence of subjective norms:
While Alzahrani and Daim (2019b), Schaupp and Festa (2018), and Walton and Johnston (2018) consider this to be an influencing aspect of cryptocurrencies, Arias-Oliva et al. (2019) conclude, based on their study, that this factor is not significant for the adoption which matches the results of Baur et al. (2015).
Privacy:
Alzahrani and Daim (2019a; 2019b), Baur et al. (2015), Peters et al. (2015), and PWC (2015) all see a positive influence due to the pseudo-anonymity of transactions. Especially the minimum of personal data included in transactions coupled with rising concerns of data and identity theft makes this a positively associated factor (PWC, 2015). At the same time, Kwaasteniet (2018) regards this as a negative aspect as only regulations countering privacy will bring the adoption to a new level.
Other factors mentioned in the literature include technology curiosity (Alzahrani & Daim, 2019a) and perceived failings of traditional financial systems (Saiedi et al., 2021).
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