A cryptocurrency is a form of exchange where individual ownership of coins is recorded and stored in a ledger in the form of a computerized database through strong cryptography, that is used for financial transactions.
If you have heard of Bitcoin, Lite coin, Ethereum, then yes, these are all different types of cryptocurrencies. They do not have a physical appearance as a generic currency such as coins or printed notes and are also not controlled by the central banking system. Cryptocurrency is independent of any central authorization, so it is immune to any government or authoritarian control.
State Of Cryptocurrency
Cryptocurrencies have seen better days before. Till 2017, the value of one bitcoin was over $19,000, whereas at present its value dropped, and is slightly over $10,000.
The values of cryptocurrency dropped after 2018, and it came down to around $3,000. But gradually it went back to $10,000 again. Ethereum also dropped from being over $1000 to just about $91. It is not that the importance of cryptocurrencies dropped, or the investors stopped investing in cryptocurrencies. The decrease in value is due to a drop in the whole stock market globally. The market had dropped its value to 30%. The price of oil also dropped significantly. So even after all this, cryptocurrency still is in high demand and shows promise for the future. It might even gain legitimacy as a protocol for future business transactions too.
Bitcoin is still the most preferable cryptocurrency, followed by Ethereum.
Cryptocurrencies are slowly getting mass-adaptability and show significant demand for the future. The transfer of these cryptocurrencies follows strict regulations to keep them safe. For transferring you will need crypto MONEY TRANSMITTER LICENSING. This allows you to use cryptocurrency in your business and also to transfer them legitimately. Without it, you may likely have to go through different legal problems.
Future Trends
Although cryptocurrency has seen its difficulties, it still holds the potential to grow bigger.
With more and more people getting accustomed to cryptocurrency and its operation, many are switching to invest in this digital money rather than other physical assets.
Let us look at a few characteristics of cryptocurrency that might transcend in the future-
1. Gateway To A Cashless Society
2020 has been a rough year for many industries because of this Covid-19 pandemic.
The entire world went into lockdown and many industries and businesses suffered serious losses as there was a shortage of workers who could work and without work, there was no way to get paid.
But, after the initial lockdown phase, more and more businesses and industries are switching to online activities, where they can still work but from the safety of their home.
As time passes by, the method of these online activities and digital business is improving and more people are shifting towards it.
Now, with the acceptance of online activities on a mass scale, it has also become of utmost importance that money should also be digitized. This way, not only is it fast and quick to transfer, but it can be done from anywhere.
2. Easier Accessibility
Cryptocurrency is not a technology that only finance experts can understand or some tech genius can use but anybody can avail it to their advantage.
Bitcoins market capitalization is much bigger and is rising even above that of Coca-Cola and Intel. This proves that Bitcoin is still on the hype train and will continue to grow.
Therefore, new technology is being invented to make Bitcoin and other cryptocurrencies much more user-friendly and easy to operate. Institutional crypto investment is increasing despite the coronavirus pandemic.
Grayscale investments had an increase of 1 billion USD in less than two weeks this year. This growth is seen throughout the rest of the year and will probably continue to grow even next year.
With a reduction in digital boundaries, it is becoming much faster than before to open a checking account in dollars or euros.
3. Blockchain Technology
Necessity is the mother of invention. It was when the physical cash system was failing, the need for an alternative rose. That is when Satoshi the bitcoin developer came up with this idea of Bitcoin. Not only is this system fast it is cheap too.
Back in the 90s, the internet was still someone’s imagination. But at present, in the era of social networks and advanced internet, we can hardly imagine a day without the internet.
But even with the advancement of technology, not everything is safe and secure. A lot of online banks are prone to hackers and frauds. To reduce this risk, improved blockchain technology has taken over the internet.
So, as more time goes by, the blockchain technology will take over more of the security of other measures.
4. Better Form Of transaction:
Suppose you are to send a large amount of money to a recipient. Normally, that would take you days. If that transfer were to be made from one country to another, that would even take months to completely process the entire transaction.
Not only that, but you would also have to go through the hassle of legalization, where the central bank would ask you questions like why are you sending this money, and to whom, and also a question will arise of how you got hold of this large amount of money.
But with cryptocurrency, as it is decentralized, many large industries and businesses are likely to transfer through crypto to avoid these stresses and safely transfer money from point a to point b.
5. DeFi Adoption Is increasing
After the downfall of the cryptocurrency in 2018, and again its imminent rise in 2019 it has become an essential part of financial investment. It is growing at a steady pace and over the past seven months; it has reached a total value of over 4 billion US dollars.
Many companies are even producing their own DeFi products to keep up with this trend.
So, we are about to see even more adaptation as more institutional capital comes to this digital asset field.
Takeaway
Although it is not written in stone that cryptocurrency is always profitable, it shows promise. Just like any other business, it also has its fair share of difficulties.
But as the days go by, the popularity of cryptocurrency is gradually increasing, and many people are shifting towards this digital cash system. It can even be said that in the coming 100 years, cryptocurrency will overtake even the paper currency and will be used in every aspect of life.
