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Only 19% of South Africans fully understand cryptocurrencies, study reveals

June 18, 2019 • Finance, Security, Southern Africa, Top Stories

Only 19% of South Africans fully understand cryptocurrencies, study reveals

Only 19% of South Africans fully understand cryptocurrencies, study reveals.

Kaspersky has released a survey that reveals just how little of the South African population fully understands the workings of cryptocurrencies, despite there being considerable interest in this fairly new technology. In the report titled ‘Uncharted territory: why consumers are still wary about adopting cryptocurrency,’ Kaspersky highlighted that despite 34 per cent of South Africans having a basic understanding of cryptocurrency and an interest in this technology, only 19 per cent of the population fully understands how cryptocurrencies actually work.

Although many celebrities like actor Johnny Depp and YouTube star PewDiePie are adopting cryptocurrencies, public interest in the technology is waning. One factor that has led to this decline and scarcity of mainstream usage is the lack of understanding of how they actually work. Approximately 70 per cent of the South African population has never purchased cryptocurrency, which further illustrates how far this technology has to go in order for it to be regarded as a standard form of investment or payment.

Kaspersky’s study shows that despite there being a deficiency in the knowledge of cryptocurrencies within the South African populace, there is a genuine interest amongst South Africans with regards to the use of cryptocurrencies. The study further revealed that certain people ultimately decided against the use of cryptocurrency despite initially expressing an understanding of the technology. This change in attitude also explains the minimal use of cryptocurrency in South Africa, as 14 per cent of the population halted their use of cryptocurrency as they found it too complex.

Another main factor that has led to the minimal usage of cryptocurrencies in South Africa is safety. The Kaspersky study revealed that 35 per cent of South African residents are reluctant to use this technology because of the belief that cryptocurrencies are unpredictable, due to this technology being fairly new. This percentage of South Africans are waiting to see how safe this technology will be before conducting any business with this new currency. Another belief among South Africans is that cryptocurrency is just another fad. The study showed that 17 per cent of the population are of the mindset that cryptocurrencies will not last forever.

Despite interest in cryptocurrency declining, there is still a demand for the use of this technology. The survey showed that 22 per cent of South Africans are interested in using cryptocurrencies in the future. This percentage of individuals are not currently using cryptocurrencies because they do not fully trust their finances in this uncharted territory of cryptocurrency. 5 per cent of the people surveyed revealed that they had experienced hacking attacks during cryptocurrency transactions, with a further 15 per cent of South African consumers being victims of cryptocurrency fraud.

“It is clear that mainstream adoption and growth of cryptocurrency is being held back due to the vulnerable nature of the technology. While there is a high appetite to use it, giving your hard-earned cash to something you don’t fully understand, or trust, is a hurdle. With the safety of investments being of paramount importance to consumers, it is vital that they take their own steps to safeguard it. Like with any cyber threat, there is no substitute for vigilance – if something looks too good to be true, then it probably is. If you want to trade crypto-assets on any exchange, pay attention to the safety of your account’s credentials. If your goal is long-term investment or use cryptocurrencies for payments, then store it in safe environments and use multiple wallets or distribute between both software and hardware. We also encourage crypto businesses to organise themselves effectively to show they are able to protect their customers’ investments,” says Vitaly Mzokov, Head of Commercialism at Kaspersky.

Merkeleon, one of Kaspersky partners, is helping to improve stability and trust with regard to cryptocurrency. Merkeloen has created legitimate marketplace platforms, cryptocurrency exchanges, crypto payment systems, and online auction platforms.

“Cryptocurrency certainly has its benefits but, as we can see, many consumers are still unaware of what they are due to concerns over security and how the technology works. It is an exciting industry to be involved in, but it is one that is built upon trust. It is, therefore, imperative that cryptocurrency businesses do all they can to protect their networks and ensure their customers’ finances are safe and secure,” says Alexey Sidorowich, Head of Sales and Business Development at Merkeleon.

Edited by Kojo Essah

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