Cryptocurrency is one of the emerging currencies and you might wonder if is cryptocurrency the future? The answer can send mixed reactions among the sections of the people involved in bitcoin and cryptocurrency.
Understanding Bitcoin
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Bitcoin is a decentralized currency that uses peer-to-peer technology, which enables all functions such as currency issuance, transaction processing and verification to be carried out collectively by the network. While this decentralization renders Bitcoin free from government manipulation or interference, the flipside is that there is no central authority to ensure that things run smoothly or to back the value of a Bitcoin. Bitcoins are created digitally through a “mining” process that requires powerful computers to solve complex algorithms and crunch numbers. They are currently created at the rate of 25 Bitcoins every 10 minutes and will be capped at 21 million, a level that is expected to be reached in 2140.
Bitcoin vs Other Currency
These characteristics make Bitcoin fundamentally different from a fiat currency, which is backed by the full faith and credit of its government. Fiat currency issuance is a highly centralized activity supervised by a nation’s central bank. While the bank regulates the amount of currency issued in accordance with its monetary policy objectives, there is theoretically no upper limit to the amount of such currency issuance. In addition, local currency deposits are generally insured against bank failures by a government body. Bitcoin, on the other hand, has no such support mechanisms. The value of a Bitcoin is wholly dependent on what investors are willing to pay for it at a point in time. As well, if a Bitcoin exchange folds up, clients with Bitcoin balances have no recourse to get them back.
There are different kinds of currencies in the world today such as bitcoin, Litecoin, and other digital currencies. In actual practice, cryptocurrency is a medium of the transaction (global and local) it is not used by all the businesses all over the world. It is due to fear and concerns among economists and business establishments on how fair these cryptocurrencies will perform.
How does Cryptocurrency work?
Cryptocurrency is a heavily secure, decentralized cryptocurrency network that utilizes encryption and acts as an authentication tool, tracking the transactions in a public database called the blockchain. This method of monitoring the transactions of a cryptocurrency in a blockchain is called mining. Bitcoin is a completely self-contained type of digital currency that needs no bank to store or make transactions.
This is equivalent to physical coins that have a value that can be used in the process of trade, such as online shopping services and products or as a means of through investment. Bitcoin is extremely secured, and the transactions can’t be tracked.
Future of Cryptocurrency
The past years have seen the global economy being volatile often reaching a point of global economic recession. Bitcoin is the number victim of such economic instability which see cryptocurrency go through various strict regulations.
However, it did not stop users or publishers from developing new currencies as it has reported that almost 90% currencies are developed every year. Since cryptocurrencies are extremely encrypted so the possibility of cyber hacking becomes null.
The younger industries are viewing cryptocurrency as the long-term currencies as it offers much security and reliability in carrying out transactions. Therefore, it is safe to say that cryptocurrency is the future.
Big Predictions for Cryptocurrency
A cryptocurrency is a digital currency that is created and managed through the use of advanced encryption techniques known as cryptography. Cryptocurrency made the leap from being an academic concept to (virtual) reality with the creation of Bitcoin in 2009. While Bitcoin attracted a growing following in subsequent years, it captured significant investor and media attention in April 2013 when it peaked at a record $266 per bitcoin after surging 10-fold in the preceding two months. Bitcoin sported a market value of over $2 billion at its peak, but a 50% plunge shortly thereafter sparked a raging debate about the future of cryptocurrencies in general and Bitcoin in particular. So, will these alternative currencies eventually supplant conventional currencies and become as ubiquitous as dollars and euros someday? Or are cryptocurrencies a passing fad that will flame out before long? The answer lies with Bitcoin.
Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. Moreover, there is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies. Some predict that all that crypto needs is a verified exchange traded fund (ETF). An ETF would definitely make it easier for people to invest in Bitcoin, but there still needs to be the demand to want to invest in crypto, which some say may not automatically be generated with a fund.
