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The topic of cryptocurrency adoption is always making its way into discussions on every facet of the industry. So, let’s talk about it. BeInCrypto breaks down all the biggest adoption stories and trends in this special in-depth article.

Since its humble beginning, the cryptocurrency industry has been focused on adoption. Whether it be for peer-to-peer payments or decentralized finance (DeFi), adoption is widely believed to be the ultimate push for the blockchain sector into the mainstream. On this front, progress has been slow because existing financial systems are so entrenched. However, slowly but surely, times are changing.

After a difficult 2018 and a sluggish 2019, this year has shown some promise. Many sectors within the larger cryptocurrency industry are booming with potential—and adoption is once again the main agenda. The COVID-19 pandemic has also accelerated the adoption of digital technologies in general which should further boost decentralization across the board.

BeInCrypto has decided to compile some of the most promising adoption stories of 2020 to gauge where we are at as an industry. Here are the top adoption stories of 2020 thus far.

Bitcoin’s whitepaper first spelled out the main driving force behind cryptocurrency adoption: spending it.

Historically, however, the public has viewed Bitcoin and cryptocurrencies with skepticism. They have long been associated with the black market instead of a true peer-to-peer currency for everyday consumers. The New York Times even reported as late as January 2020 that black market dealings in BTC are at an all-time high. However, slowly but surely, this perception is changing with new developments on the adoption front.

Cryptocurrencies have often tried to position themselves as an alternative to fiat currency with mixed success. Today, in 2020, we are getting closer. A vast array of services are currently trying to tap into spending cryptocurrencies like regular money. Usually, this happens on the backend by allowing consumers to spend Bitcoin and other cryptocurrencies at places like convenience stores, just as they would cash.

Implementing such an idea has proven difficult, however. Not only is the HODL mentality strong, but the extreme volatility in the cryptocurrency market often discourages users from spending.

Still, the number of users spending cryptocurrencies has grown significantly since 2013. As reported by CNBC, Chainalysis found that consumers spent $190M monthly on average in 2017 up from just $9.8M monthly in 2013. More users today also have more Bitcoin to spend, as well.

BeInCrypto has reported that the last three years have seen cryptocurrency wallet adoption triple. The environment seems primed for cryptocurrency-related payments.

As of 2020, two major areas may propel the cryptocurrency payment sector forward and push adoption. One area is prepaid cryptocurrency cards. Although they have been around for some time, the first such card was approved in the United States only in June 2020. MasterCard teamed up with BitPay to release the first prepaid card for cryptocurrency users in the United States. It’s intended to be intuitive and users can spend their cryptocurrencies anywhere MasterCard is accepted.

However, other startups are taking adoption a step further with a new concept: cryptocurrency rewards for purchases. The idea is simple: purchasing items with your debit card allows you to receive BTC as a reward.

BeInCrypto reported in April 2020 that the San Francisco-based startup Fold is working with Visa to make this a reality. As part of Visa’s Fintech Fast Track Program, Fold will be launching a Visa debit card which will offer up to 10% in BTC rewards for every purchase. As Fold’s Chief Executive Will Reeves told Forbes,

If people don’t understand Bitcoin as money yet, they certainly will understand it as a better reward.

A rewards-based system solves two major problems. Firstly, it’s not taxed because cryptocurrency is not being spent. Secondly, it sidesteps the issue with transaction fees and slow confirmation times with Bitcoin by accumulating the leading cryptocurrency as a reward.

In effect, it has the potential to introduce an entirely new group of consumers to Bitcoin and other cryptocurrencies. Other startups now plan to issue similar rewards-based cards that would integrate cryptocurrencies with everyday payments.

As promising as payments are for the cryptocurrency space, they’re not the driving force for adoption nowadays. Instead, another sector of the cryptocurrency world is gaining prominence—decentralized finance.

There’s been a lot of buzz about decentralized finance (DeFi) on Ethereum as of late. Compound’s (COMP) explosive rise to a market capitalization of over $500M over the course of just two weeks has forced everyone to take DeFi seriously.

Although the sector still faces issues valuing itself, there is no denying that the sector has breathed new life into the cryptocurrency market. DeFi has everything to do with adoption. It essentially cuts out the middleman of traditional finance and also decentralizes the entire financial world. Although it’s an innovation that will take time to catch on, its potential is clear.

So, how does DeFi specifically help with cryptocurrency adoption? In more ways than you might expect.

DeFi’s ultimate goal is to replace the ‘legacy’ financial system which is currently monopolized by a few leading entities. —it can rework the entire definition of finance as we know it today. 

Banks are often thought to be the sole gatekeepers of credit. They lend out money to businesses and individuals, sometimes at exorbitant rates. In some cases, competition is sorely lacking. Decentralized finance promises to democratize this process by cutting out the banks entirely, thus lowering fees for borrowers.

Compound (COMP) and others have been leading the push to provide decentralized lending platforms where users can earn interest on deposits and borrow assets. Maker DAO (MKR), for example, is another decentralized credit platform where users can take out DAI (a stablecoin pegged to USD). Oftentimes, Bitcoin wrapped on Ethereum (wBTC) is used as collateral for these loans.

Thus far, decentralized lending projects make up a large portion of the DeFi landscape. COMP alone accounts for some 36% or so of the entire market. There is a clearly growing demand, and adoption has really taken off in May and June of 2020.

One of the main components of finance is undoubtedly trading and portfolio management. Today, a whole industry exists which manages portfolios for everyday people. These middlemen take a cut, of course, and dictate the financial market through their decisions. Sometimes this process can be less than transparent. However, decentralized finance offers alternatives.

Balancer (BAL), for example, is a non-custodial portfolio manager that automates this process through price sensors and providing liquidity. Other projects, like Melon (MELON), allow users to create their own investment funds which other users can put their money into. This democratizes the investment community in a radical way.

Although both of these projects have been in development for years now, their user bases have only begun to grow drastically this year.

2020 has also brought to light new use-cases for the DeFi space which are still being developed.

Insurance, for example. is one sector which is still in its infancy but is being worked on by various projects. This would allow users to pool money together to provide insurance to individuals through smart contracts. Prediction markets are another subset of DeFi that is gaining traction, with projects like Augur leading the way in 2020. Other use-cases like synthetic assets, decentralized leverage trading, and derivatives, have all accelerated their development in 2020.

For now, the basics of DeFi are being adopted by users with lending and investment portfolios. However, over time, we can expect DeFi to continue to innovate as more and more startups emerge on the scene.

Adoption in the DeFi can most concretely be measured by looking at the total value of assets locked in DeFi-related platforms. As of July 12. 2020, there’s some $2.29B in assets currently locked up in the DeFi space—an all-time high for the industry.

Another way to measure DeFi is to look at the growth of certain platforms. For example, at the time of writing, Synthetix has seen a 9.97% increase in locked assets. The platform, specializing in derivatives on Ethereum, is the top gainer for locked-up assets in the DeFi space as of July 1.

However, there’s yet another, simpler way to gauge how the DeFi space is growing. Because almost all of DeFi is currently on Ethereum, one can assess growth by looking at Ethereum’s on-chain metrics, such as wallet growth, gas fees paid, and the number of daily transactions.

On this front, Ethereum is looking exceptionally strong. Recently, Ethereum broke all records for daily active addresses with over 466,000 daily active addresses on June 29. Although the sheer amount of daily transactions still hasn’t broken all-time high, the growth has been much more organic than what we saw in late 2017 and early 2018.

Altogether, the growth of Ethereum’s userbase, the rise in assets locked in DeFi, and the many projects currently being built are a clear indication that we are amid a new wave of adoption. Legacy finance will soon have to contend with this decentralized competitor.

As many have come to realize, the gaming world will likely serve as a gateway for cryptocurrency adoption. Not only are blockchain-based games growing in popularity, but NFTs can easily replace in-game items and provide a safe means of transacting.

Blockchain brings many new features to the gaming world which is why this sector is so exciting:

Addictively-fun games will provide the blockchain space with a steady stream of dedicated users. That’s why some developers, particularly on Ethereum, have been focusing on gaming as a way to boost adoption.

The year opened with Ubisoft partnering with Ultra (UOS), a gaming platform that’s been described as ‘Steam on the blockchain.’ Ubisoft has been responsible for famous gaming franchises like Assassin’s Creed, Far Cry, and many others.

This year, many blockchain-based games are slated for release. One high-anticipated game is called ‘Sandbox.’ This Minecraft-style blockchain metaverse is driven by users and will be launched in late 2020. So far, the project has held two presales for LAND. Its last presale, on Feb 16, sold some 6,192 pieces for around $206,000. It is rumored that the project may hold another round due to its success.

Sandbox remains the most promising blockchain game because it already has a large user base, with nearly 40 million downloads since the game first launched in 2012. In 2020, it’s being ported over to a blockchain-based system after being purchased by Animoca Brands.

This year has also seen the involvement of major gaming companies jumping into the blockchain space. Gaming giant Atari has also been trying to resurrect its brand by expanding into the blockchain space. As per an announcement on June 12, 2020, Atari will be issuing a token that will be unique to its gaming ecosystem.

The old gaming company, formed in 1972, will be issuing its own token as a result. The iconic gaming firm will be working closely with Sandbox to create 3D voxel versions of popular Atari games like Pong and RollerCoaster Tycoon.

Other blockchain-based games anticipated for a 2020 release include Age of Rust, CryptoWars, Hash Rush, Neon District, and more.

Recently, BeInCrypto published a long read on the race among governments to issue their own stablecoins. Called central bank digital currencies (CBDCs), the first issuers of this exciting new sector will undoubtedly have an advantage on the world stage.

CBDCs promise ease-of-use, extremely low costs, and an alternative to the USD-dominated world economy. So, it’s unsurprising that countries like China have stepped up efforts to issue its own ‘digital yuan,’ expected to come out sometime this year.

However, it’s not just CBDCs

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