The Future of Cryptocurrency
The Future of Cryptocurrency – Every once in a while, there comes a technological breakthrough that changes the way we do things. The world has seen countless such innovations, over the past few centuries, that have slowly molded our human civilization into what it is today. From communication to transportation to finances, every human aspect keeps evolving and advancing. Another important point to note is that the pace of technological progress is becoming faster and faster.
One of the most interesting developments that is happening right now, as we speak, is that of cryptocurrencies. We are witnessing the building of a financial revolution, which will change the way we look at money and how we deal with it. Some say that this development is going to be even more significant than the advent of the internet.
What Are Cryptocurrencies?
Cryptocurrencies are basically digital currencies. But unlike fiat currencies, they are decentralized and private. A fiat currency is printed and issued by the central bank of a country and it controls every aspect of it. This has been going on for centuries.
A cryptocurrency, however, can be issued on a completely decentralized network by individuals or groups, such that no one has the power to control it. These decentralized networks (blockchains) operate according to the pre-determined rules of the network. Their prices (or value), in most cases, are decided by the free market.
This whole new groundbreaking concept started, when the inventor of Bitcoin, the most popular cryptocurrency in the world, published his whitepaper for it in 2008. In fact, it was only after Bitcoin was introduced to the world that blockchain technology became popular.
Future of Cryptocurrencies
Today, even though we have a well-functioning ecosystem and a whole market for cryptocurrencies, they are still in the developmental phase and most people don’t know about them. You could compare the current decade with the 1990s when the fundamental technologies of the internet were being built.
Most people back then didn’t know about or didn’t understand the internet. The same is the case with cryptocurrencies today. In the future, however, thanks to their unique capabilities, they will change how we view money and understand the concept of value. Some hardcore proponents of the technology even think that they will replace the current financial system. One thing is for sure though, they’ll become a vital part of life.
Cryptocurrencies Will Be Everywhere
Slowly but surely, cryptocurrencies are becoming a household name. This happens with every new technology. Initially, only the technology enthusiasts know about it and then it spreads into the public domain, as user interfaces and user experiences become more polished. The same is bound to happen in this case too. Just as the internet and smartphones became mainstream and everyone today uses them, cryptocurrencies will be used by everyone in the future.
It will be a common thing for people to pay for goods and services with a crypto token. It will be an addition to the methods of payments we already have. In fact, people will also pay each other with crypto. It wouldn’t be too far-fetched to say that a huge portion of the financial transactions will involve cryptocurrencies. It will be the preferred method for everyone in the future.
Transactions Will Become Cheaper & Faster
A huge drawback of the legacy financial system is that transactions take too much time and they cost too much, especially in cross-border transactions. In a digital age, where everything happens at a blinding speed, this is simply not acceptable. Also not acceptable is the fact that we pay a highly unfair amount of money as fees to access and transact with our own money.
All that will change with the wide adoption of cryptocurrencies. In fact, the technology already allows for it. There are many cryptocurrencies which you can use today to send millions or even billions of dollars to anyone in the world, within a second or two. And you just pay a few cents for the transaction. In fiat currencies, it would take days and would cost thousands of dollars to conduct the same transaction.
This will make financial access much easier and cheaper. People in the developing countries will profit the most from this particular benefit of cryptocurrencies.
Every Country Will Have Its Own Crypto
One of the trends that we have already begun hearing about is countries issuing their own cryptocurrencies. Many argue that a central bank’s cryptocurrency is not really a cryptocurrency since it will be a centralized one. But if it provides the same benefits as a decentralized cryptocurrency, then it might be considered one too.
In fact, Venezuela has already launched its ‘Petro’ cryptocurrency which is backed by oil and gas. There are also talks about China launching their own cryptocurrency soon. In the future, every country will have its own digital currency and the concept of fiat currency could become obsolete. If this happens, banks will play a very limited role since cryptocurrencies can be stored and transacted in, by the people themselves. This could be similar to how letters became less popular when email was invented.
Bitcoin – The World Reserve Currency?
The US dollar is the world’s reserve currency today and there is no doubt that this gives the US a huge political edge. As a result, many countries in the world are motivated to shift away from the dollar, especially China and Russia. Now that cryptocurrencies are gaining more traction every year, many experts are wondering whether Bitcoin, which is the king of the crypto world, could take the dollar’s place.
Bitcoin is a non-sovereign currency and so, politics would be taken out of the equation if it becomes the world reserve currency. Although this could take a long time to happen, it is still plausible. If that happens, this will be a huge change to how the financial system works and it will reshuffle everything. The concept of money itself will become democratized and the new financial structure will be completely based on cryptocurrencies.
The Future of Cryptocurrency