CryptoRefills, in cooperation with Cointelegraph Research, has published the first global research on consumer adoption of cryptocurrencies for purchasing goods and services.
This report, Cryptocurrencies in Retail: Consumer Adoption Report 2021, aims to provide a global picture of what is the current state of user adoption of bitcoin and other cryptocurrency as a means of payments for goods and services. The report is based on surveys conducted on “cryptoshoppers” and CryptoRefills aggregated data.
It provides quantitative and qualitative analysis of “cryptoshopper” demographics, of the adoption of cryptocurrencies for everyday purchases, including drivers and barriers as well as purchase behaviours and statistics.
From the survey with 290 unique participants combined with our business and transaction data, it is observed that paying for goods and services with cryptocurrency is in demand and considered useful by users yet faces both technical and business challenges.
New solutions, still quite fragmented at the moment, are being offered to crypto shoppers to overcome current challenges and improve the overall shopping experience.
Although the report is confident in saying that shopping with cryptocurrencies is still in its infancy, it is growing and evolving at an incredible pace and is likely here to stay.
A fact that is measured by the regulation of crypto transactions is coming in the next two years, and it’s going to transform the use of crypto in payments.
1. Crypto-consumers are scattered all around the world. They have varying demographic features and are from different socioeconomic backgrounds. Yet, some prevalent patterns exist.
For example, being a male younger than 35, being from a lower-middle-income country, earning less than $20,000 annually, and being self-employed are widespread, if not stereotypical. As many as one-fifth come from the world’s most fragile economies and see a solution for participating in the global digital economy in cryptocurrencies.
Others, instead, are from developed markets, often high-income earners, and many have been exposed in one way or another to the blockchain, maybe as part of their work or because of trading.
2. Despite its higher fees and longer blockchain processing times, crypto-consumers favour Bitcoin over all other currencies, as 79% of them claim they hold some Bitcoin.
Ethereum (54.5%) and Litecoin (31.7%) are the followers in terms of preference, with the latter being also frequently used for shopping.
In general, Ethereum and some top ERC20 tokens are in strong demand but less adopted for shopping, likely due to high “Gas” fees and availability at stores. The same goes for top stablecoins, which are also popular but face the same challenges as other ERC20 tokens. Other currencies (e.g., Dash) may be slightly less favoured today, but then for practical reasons (i.e., speed and fees), they are really popular for shopping.
In general, the cryptocurrencies the crypto-consumers have to use for shopping today are not necessarily the ones they would like to shop with the most.
This may drive adoption for faster blockchains and scalability solutions for the most favoured currencies (i.e., BTC, ETH, ERC20 stablecoins), or on the contrary, as shopping with cryptocurrencies increases, users may start changing their preferences towards other currencies that deliver the best shopping experience.
3. The Lightning Network is a viable solution to many issues faced during crypto-shopping (e.g., speed, cost, etc.), and its current recognition and adoption are growing but still quite limited.
The Lightning Network is, in fact, the first scalability network available to users for shopping, and it serves the most favoured coin by shoppers (i.e., Bitcoin), but it is still early to say if we will see massive adoption of this technology or if it is over-hyped.
4. What crypto-consumers buy most are digital goods, including mobile top-ups, game credits, mobile apps, and digital entertainment services.
Most crypto-consumers believe that cryptoshopping has outstanding potential and will be more common in the future.
Also, most crypto-consumers (34.1%) claim they will buy something using cryptocurrency within the next 30 days, and a staggering 25% claims they will purchase goods or services using cryptocurrency within the next 7 days, likely meaning that once crypto users adapt their habits and get acquainted with paying for goods and services with crypto-money, they are likely to continue doing so (when given the opportunity).
5. Nearly half of the crypto-consumers prefer or fall back on indirect shopping via gift cards, vouchers, or coupons.
This appears to be a neat solution to access stores or products currently unavailable for crypto-shopping (e.g., due to marketing strategies or company policies).
The unavailability of a crypto-payments option for most renowned brands and stores likely explains why crypto-consumers consolidate their crypto-shopping activities at one-stop shops that can satisfy a variety of the customers’ needs via gift cards.
6. High transaction fees (49.4%), store or product unavailability (33.9%), long processing delays (25.9%), and price volatility (19.7%) are the most challenging barriers against the mass adoption of crypto-shopping habits. 55.5% of crypto-shoppers consider themselves innovators, and as such, are willing to overcome costs and complexities in order to utilise the newest technology.
When the current technical and business challenges are resolved, it is likely that we will see crypto-shopping moving much faster through the “adoption curve”.
7. Crypto-shopping is not just another fancy payment method, rather it is a decent solution for many social, economic, and technical issues.
This includes, but is not limited to, financial inclusion of un-or-underbanked people who survive on minor online tasks or small personal businesses, avoiding red-tape, mitigating privacy concerns, preventing losses from buy/sell spreads for people already earning crypto-money, and enabling cheaper and faster alternatives to current international remittance methods.
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