This article comes fromhackernoon, the original author: Lihan Hyunwoo Lee, compiled by Odaily translator Katie Ku.
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Investors have seen unlimited business opportunities from cryptocurrencies, but as a new type of asset in the financial market, cryptocurrencies also have novice characteristics. For example, trust still needs to grow, and there is a lack of large-scale landing and related information, which makes cryptocurrencies need more participation and support on the road to becoming a mature asset.
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Why is institutionalization so important?Because institutionalization will drive positive growth. Not just the cryptocurrency ecosystem and its investors, but the market and the industry as a whole.Entering the world of crypto-asset investment by experienced players with large assets will increase market vitality.And demand creates the market!Investment in encrypted currency assets will also bring more products and encrypted currency asset services to the market, such as encouraging the implementation of regulatory systems, legal standards, improving transparency to avoid information asymmetry and creating a fair market environment.
The institutionalization of encrypted currency assets will accelerate the process of implementing encrypted currency assets and blockchain technology, and turn the concept of blockchain into reality.
But that day has not yet come.Cryptocurrency has just passed its nascent stage, and all possibilities and innovations have not yet been realized, such as decentralized data transparency, point-to-point currency transactions, and smart programmatic contracts. But the start of all emerging technologies is not smooth sailing,
Here are 5 problems and solutions that hinder the development of crypto assets into institutionalized assets:
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1 Improve technology
These issues have been addressed. For example, scalability solutions, faster transactions and low transaction fees have been tested and applied, such as the expansion of the Ethereum Layer 2 protocol or the choice of Bitcoin’s Lightning Network (Lighting Network). As technology develops, cryptocurrencies are also more accessible, which will facilitate widespread adoption and acceptance of institutionalization.
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2 Defining regulationCryptocurrency is a decentralized network under protocol management and community consensus. Early over-regulation will hinder the development of cryptocurrency.
At present, cryptocurrency has developed into an attractive investment project. More and more companies issue their own tokens and accumulate early capital. However, there are still uncertainties about how to classify various cryptocurrencies. Still need to keep up.
The good news is that people want transparency, token issuance, and investment selection to have common standards. With the active participation of governments and individuals, the entire ecosystem will become more equitable. Strengthening the disclosure of information that is beneficial to users, and regulating information that is harmful to user security, the day when cryptocurrencies become widely accepted assets will soon come.
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3 Raise public awareness
This requires more information disclosure, wider coverage and implementation in the daily life of the public, and vigorously promotes cryptocurrency and its advantages for future development. Changing public perception of cryptocurrencies can only be achieved by normalizing their advantages and innovations.
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4 Lack of specialized services and specific productsCryptocurrency assets cannot stand alone, and any widely used product has multiple supporters behind it
Witness the development of the entire cryptocurrency, investment and audit companies provide customers with digital asset services and asset resources, and the banking industry begins to develop exclusive currencies. New products and services not only create better opportunities for the management of cryptocurrencies, but also make cryptocurrencies more accessible to investors and the general public.
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5 Reshaping perspectives
It is only 10 years since the birth of cryptocurrency, and investment in cryptocurrency assets has just started. The public misunderstands that cryptocurrencies can act like long-standing institutionalized assets, but dont forget that cryptocurrencies are not yet developed.
