Crypto Adoption Is Still Being Held Back by a Lack of Technical Knowledge
Confusion around crypto storage, regulations, and other factors that tech-savvy users take for granted can leave everyday users on the sidelines and keep them away from the technology. While crypto and blockchain are becoming increasingly mainstream, the complexity of the technology can make it difficult for everyday users to understand, creating a barrier to entry for many. According to a survey conducted in August by Australian crypto exchange Swyftx, 43% of
Confusion around crypto storage, regulations, and other factors that tech-savvy users take for granted can leave everyday users on the sidelines and keep them away from the technology.
While crypto and blockchain are becoming increasingly mainstream, the complexity of the technology can make it difficult for everyday users to understand, creating a barrier to entry for many.
According to a survey conducted in August by Australian crypto exchange Swyftx, 43% of the 2,229 respondents said they had not used the technology because they were unsure how it works.
Similar data from the 2023 Crypto Literacy Survey found that at least 28% of 3,000 respondents worldwide shared the same sentiment.
In 2023, the United Kingdom's Financial Conduct Authority (FCA) published a research note showing that at least 30% of the 2,337 respondents cited a lack of understanding as a reason for staying out of the space.
Lance Morginn, president of market risk management and analytics firm Blockchain Intelligence Group, said the crypto market can "intimidate people with a vast number of unfamiliar terms."
"At first exposure, it can come across as overly technical and disconnected from traditional money. Words like blockchain, token, and technology can trigger a sense of fear, making people reluctant to try crypto," he said.
"I often hear comments like 'I don't know what crypto is to even use it' and 'I feel stupid when it comes to crypto.' Questions like 'How do I use it? What can I do with it?' come up all the time."
In its fifth annual Global Crypto Adoption Index report, blockchain data firm Chainalysis stated that the January launch of spot Bitcoin BTC exchange-traded funds (ETFs) in the United States was a key driver behind a significant increase in crypto usage throughout the year.
Investors can now buy and sell certain ETF shares at market prices on stock exchanges without needing deep technical knowledge.
Related: How ETFs Are Reshaping the Crypto Market
According to Morginn, the industry should focus on drawing users in by highlighting the more accessible aspects of crypto rather than trying to impress them with technical jargon.
"The crypto industry needs to create simple educational resources and user-friendly platforms to help everyday users get comfortable with crypto," he said.
"When the industry directly addresses concerns around complexity, crypto and digital assets will reach a broader audience, encouraging more partnerships between financial institutions, service providers, and more users to own crypto."
A lack of hardware knowledge can also be a barrier
Beyond not understanding how crypto and blockchain technology works, another obstacle can be a lack of familiarity with certain hardware involved — such as how to securely store personal assets like Ether ETH.
Kadan Stadelmann, a blockchain developer, operational security expert, and CTO of Komodo Platform, said storage can be an anchor point for some users.
"The industry always needs more education, especially free technical information for the unbanked," he said.
"If we confuse people with overly complex security setups, they'll be pushed toward custodial exchanges, which defeats the entire purpose of Bitcoin."
According to Stadelmann, the added technical complexity can also make "things less secure rather than more secure" because systems that are too complex for users risk being mishandled, causing them to lose their funds.
Related: Is Onboarding Too Hard? Crypto Adoption Still Faces Major Hurdles
"The vast majority of digital asset holders don't have the technical expertise to use complex storage strategies," he said.
"The bigger risk is storing your Bitcoin in a way that's overly technical. Each individual has to determine what is practical and safe," Stadelmann added.
Chainalysis estimates that between 17% and 23% of Bitcoin's total supply may be permanently lost due to compromised private keys, users sending to the wrong network, corrupted wallets, and more.
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Crypto can appear complex to the average person, often due to its association with advanced technology and sometimes complicated user interfaces, said Alicia Kao, Managing Director of crypto exchange KuCoin.
However, she said the industry is actively working to address the issue, with a shift in focus away from serving traders exclusively toward reaching the general population as well.
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"The key is striking a balance — preserving the innovative nature of crypto while making it more accessible," Kao said.
"By simplifying complex concepts, providing user-friendly interfaces, and offering comprehensive educational resources."
While she acknowledged it is an ongoing process, she believes it is critical to "the widespread adoption and success of this revolutionary technology."
Phillip Lord, president of crypto tap-to-pay app Oobit, believes many people view crypto as too complicated, which has created real obstacles to mass adoption.
"For everyday users, complex terminology, the need to grasp unfamiliar concepts like wallets, keys, and decentralized networks, as well as the fear of losing assets due to user error have created significant friction," he told Cointelegraph.
"The complexity of understanding blockchain technology and how it fits into daily life has kept many people away."
A survey report published on February 22 by Web3 key management network Web3Auth, drawing 3,378 responses from Web3 users, developers, and decision-makers worldwide, found that the learning curve and complexity ranked among the top five reasons cited for avoiding the technology.
According to Lord, while early adopters and tech enthusiasts are comfortable diving into these complexities, he believes everyday users find it overwhelming and unfamiliar.
He said that without a proper onboarding experience, many users will opt out before they even get started.
"The traditional crypto space has catered to the tech-savvy, leaving everyday users feeling excluded. That perception needs to change if the industry wants to achieve mainstream usage," Lord said.
"Crypto shouldn't feel like a foreign concept — it should be as simple and intuitive to use as any other financial asset, integrating naturally into users' daily lives without requiring intensive education."
A complex regulatory environment can also be a barrier
Saad Naja, CEO and founder of EdTech and Web3 gaming ecosystem PiP World, said there has been some progress in simplifying the technology for users, with easier pathways between crypto and fiat currency.
However, he believes that in some areas it remains "complicated and less accessible, particularly on-chain activity," and the industry needs to simplify the understanding of crypto and make it more approachable for a wider audience.
"Concepts like navigating different blockchains, transferring assets, and interacting with DeFi are not things the average person encounters in traditional finance, making them harder to grasp," Naja said.
Naja said the lack of clear regulation can also create confusion, with some users choosing to stay on the sidelines until the rules around the market become clearer.
In May 2023, the European Council passed the first comprehensive regulatory framework for the crypto industry. Other countries and jurisdictions have been slower to establish frameworks for crypto.