The Future of Cryptocurrency: What You Should Know
The fact is cryptocurrency is growing in popularity as an alternative to the traditional money system. In this blog post, we will look at how cryptocurrency works and what the future holds for digital currency.
Cryptocurrencies have been dominating the news lately for record gains and losses. From the Dogecoin drama to the ransomware demands in Bitcoin, a growing number of people are wondering how the digital currency landscape will evolve in the future.
Cryptocurrency: An Overview
Cryptocurrency is based on blockchain technology consisting of a network of peers that carry on digital currency transactions. The transfer of digital currency is signed by the private key of the sender that is broadcasted on the peer-to-peer network. The digital transaction gets confirmed after a certain period. After the transaction is completed, it cannot be reversed in any manner.
Some key players in the cryptocurrency system are the miners. Miners receive notification of the digital currency transaction who then sign it and send it back to the network. After confirmation of the transaction, a node will make an entry into the blockchain database.
The growth of cryptocurrency had accelerated during the COVID-19 pandemic. But what does the future hold for digital currency? Let’s see what the experts have to say about the growth and evolution of cryptocurrency.
Experts’ View on Cryptocurrency
A CNBC survey asked experts about the emergence of cryptocurrency as the dominant mode of currency.
Fredrick Kaufman, who has written a book on the history of cryptocurrency thinks that cryptocurrency will have similar properties to the dollar before 2071. He says that digital currency will likely behave similar to fiat money rather than precious metals. Moreover, Kaufman also believes that the encrypted algorithm of the cryptocurrency is here to stay for long-serving as a medium of exchange and store of money similar to the traditional currency. He believes that the convergence of digital technology and human lives will drive a growing number of people to invest in digital tokens.
Another expert, Dan Egan, who works as the vice president of investing and behavioral finance at Betterment says that digital currencies such as Bitcoin have proved to be useful for speculative investment and money transactions. The trend will unlikely disappear in the future. However, he also says that a challenge is how to generate sufficient energy required to meet the increasing demand of the cryptocurrency platform. In addition, he also points out that the possible friction between digital currency proponents and state actors could make it a black market exchange of value.
Dragan Boscovic who works at Arizona State University as director of Blockchain Research Lab says that central banks at the moment are busy making rules regarding cryptocurrency. They have realized that digital currency will become mainstream within the next decade.
Lastly, Ivory Johnson who had established Delancey Wealth Management thinks that digital currency will likely cause a disruption in the traditional market. He points out the efficiency of digital currency in carrying out payment transfers across the globe without significant delay and cost. Moreover, he also says that cryptocurrency particularly Bitcoin would likely become a reserve currency within the next five decades. It also will serve as effective investment security that will make a lot of people rich.
Should You Invest in Digital Currency?
Bitcoin has served as a good passive investment option over the last decade. The limited supply and the potential of serving as an alternative form of investment will make digital currency a key long-term investment option.
One of the largest cryptocurrency exchange company Coinbase has recently signed a contract with a 401(k) provider, allowing employees to invest a part of their contributions in digital currencies including Bitcoin. The agreement makes sense in hindsight that digital currency has proved an effective long-term hedge.
“Bitcoin could be valued at $500,000 by 20. The popularity of digital currency is expected to grow as we move forward due to the decentralized nature of the exchange. A lot of corporations are investing in Bitcoin and other digital currencies.
Many individuals and companies consider cryptocurrency as a preferred mode of the transaction as compared to the traditional banking system. It is particularly useful in countries that don’t have developed banking systems.
A number of experts also believe that digital currency will boost the economy due to the low costs of transactions. In this context, digital currency can become a preferred mode of payment. There is greater transparency in carrying out digital currency that will encourage more people to carry out trade and business activities.
Final Remarks about the Future of Cryptocurrencies
The future looks bright for digital currencies. Digital currency could become the primary mode of payment in the years ahead. Also, cryptocurrency will likely boost the world economy due to low transaction costs and a convenient mode of payment.
In the years ahead, employers may also pay wages and utility bills in cryptocurrency. Entrepreneurs will probably embrace cryptocurrency due to the ease of carrying trade and business using digital currency.
The trading of digital currency may be a legal grey area in most countries. Criminals are using digital currency as a mode of payment due to a lack of regulatory oversight regarding digital currencies. Militants and rouge individuals are asking for donations in cryptocurrency. Despite the negative aspects of cryptocurrency, an increasing number of people all over the world will embrace cryptocurrency as an alternative mode of payment and speculative investment option.
Digital currency based on blockchain technology may further evolve making it more secure. Even with all the shortcomings, a growing number of key market players are pinning hopes on cryptocurrency to increase wealth.
In the years ahead, cryptocurrency will likely become a dominant player particularly when the digital currency exchange trading platform gets approval. If you are thinking about investing in cryptocurrency, you should consider the high volatility of digital currency. Always get the advice of a financial expert before investing in cryptocurrency.
Eva Berns is versatile and a gifted writer. She joined XtraPoint Football a few months ago and has helped our readership grow a lot. She always connects with the readers and produces noteworthy news pieces. She is also working on her first novel, which she plans to publish by the end of this year.