The way that cryptocurrencies have been implemented – with blockchain technology – is absolutely not a viable consumer product, says South African entrepreneur\u00a0Hannes van Rensburg.<\/p>\n
Van Rensburg, who sold\u00a0his payments platform Fundamo to Visa for $110 million (R1.4 billion) in 2011, was speaking at StartupGrind Cape Town on Thursday evening, reports\u00a0Ventureburn<\/a><\/strong>.<\/p>\n He said that cryptocurrrencies that\u00a0use the blockchain\u00a0won\u2019t see the same kind of adoption as\u00a0credit or debit cards because of the impracticality of settling payments on the blockchain.<\/p>\n \u201cI think there are\u00a0a lot of things that could happen in the back. I think there\u2019s a lot of things that could happen around settlement of transactions and so forth, but it is a fallacy. I know people are going to shoot me, but I am just a straight shooter,\u201d said Van Rensburg.<\/p>\n One of van Rensburg’s biggest sticking points is the way in which cryptocurrency transactions take place – also arguably one of their biggest selling points.<\/p>\n \u201cIf I do a transaction in Bitcoin it means that before it is actually concluded with the text in the distributed ledger, 50% plus one of the participants in this ecosystem have to acknowledge that they have written it into the ledger,” he said<\/p>\n \u201cNow just consider if you were to run it as a global currency where, before you walk out of the shop having bought my packet of chips for a dollar, half the population has to acknowledge that I bought a packet of chips. It isn\u2019t going to work in that environment.”<\/p>\n Van Rensburg said that he still believed that\u00a0blockchain was an important technology – just not one that is consumer-driven.<\/p>\n Good for business but not for consumers<\/strong><\/p>\n Van Rensburg’s viewpoint is not a unique one, with many financial experts around the world voicing their concern about the commercial applications of Bitcoin and other cryptocurrencies.<\/p>\n Regulatory uncertainty is a big hurdle, especially in the financial-services industry. Legal frameworks, globally, will have to change to adapt to the growing use of the new technology, said a former former\u00a0US Reserve official speaking to the Wall Street Journal.<\/a><\/strong><\/p>\n There are also issues of\u00a0cybersecurity; despite backers of blockchains claiming that they are secure by design, the technology hasn\u2019t been adopted widely enough yet for it to be seriously tested.<\/p>\n