What Is the Future of Cryptocurrency?
With laws clamping down on Bitcoin mining and prices going through the roof, the future of cryptocurrency is hazy at best.
For centuries, money was a straightforward concept. There was money that was guaranteed by a state or government. For most of human history, money was backed by gold—or just plain made out of the stuff. This was a status quo that seemed immutable for ages.
And then Bitcoin came along in 2009 and changed everything. All of a sudden, currency was not about gold or silver. It didn't even have to be backed by a government. Bitcoin and the cryptocurrencies that followed ended up making an entirely new economy.
Blockchain technology and cryptocurrencies are, without a doubt, de rigeur. There are people discussing what is the next cryptocurrency to boom, if Ethereum will overtake Bitcoin, and if blockchain could give us a smarter energy grid.
As popular as the boom is, the future of cryptocurrency isn't exactly clear. It could become hyper-popular, or it could end up going the way of the dodo. To figure out where it's headed, we took a look at the past, present, and future.
If you want to get a good grip on Bitcoin and other cryptocurrencies, reading Blockchain by Mark Gates will definitely help. He pointed out that blockchain technology had pretty sketchy, hacker-based roots.
Bitcoin, the first real cryptocurrency, was invented by Satoshi Nakamoto in 2009. It was an experimental concept to see how people would trade it. For the longest time, blockchain-based currencies were considered to be criminal currencies that were only traded on the Dark Web.
It seemed as if cryptocurrencies would remain in obscurity for the longest time. However, mainstream investment has changed the way people look at cryptos. With increased interest in Bitcoin mining from tech groups, finance firms, and even banks, it became clear that the future of cryptocurrency could definitely be a bright one.
Extreme investment caused Bitcoin's price to skyrocket and also encouraged a lot of copycat coins to be made.
It's no secret that there's currently a major boom in cryptocurrencies. Had people known that the future of cryptocurrency would have a single Bitcoin be worth $10,000 or more, most people would have immediately invested in its starting position.
Knowing that, a lot of groups created their own Bitcoin mining alternatives. Some succeeded and grew in value, others failed. Regardless, it's clear that there's a lot to be said about this business model and what it offers for people who want to invest in new tech.
The future of cryptocurrency definitely seems to be bright now that corporations are involved.
In its beginnings, cryptocurrency was about as anti-corporate as it got. It was a criminal currency that was not only ignored, but openly mocked by bankers. Nowadays, things have changed quite a bit!
Microsoft has recently announced that they would be investing into working with digital coins. New stock market apps are also offering up the ability to invest in cryptocurrencies as a side option.
Some banks in Asia are even going so far as to make their own cryptocurrencies to transport money. Ripple, one of the newer cryptos to gain steam, is an example of that.
Initial coin offerings, too, have started to become a major method of fundraising for new companies.
ICOs, as they're now called, are the new IPO. These are offerings of cryptocurrencies that will be used to fund better tech, better blockchain coding, or other new businesses.
On top exchanges, this can lead to huge amounts of profits for both investors and companies. For many investors, this bodes well. If anything, the future of cryptocurrency could be one that acts as an investment vehicle.
One of the largest hurdles when it comes to seeing the future of cryptocurrency seriously blossom is the fact that it's not necessarily the kind of cash that most companies would be willing to accept. In the past, Orbitz and other major retailers have tried to accept it.
The volatility of the currency, though, was often what stopped it from being accepted. However, even that issue is changing thanks to services like Monaco. Monaco offers cryptocurrency credit cards that also allows you to get cash back—just like any normal car.
It's clear that the future of cryptocurrency is one that may have fiat money shaking in its boots.
Cryptocurrency has a lot to offer in terms of investment, transactional safety, and more. Many futurists even believe that cryptocurrency may end up overtaking fiat currencies by 2050 because of its rapidly evolving, widespread use.
In a recent article in Time Magazine, futurist Thomas Frey predicted that digital currency will wipe out around a fourth of all fiat currencies currently being traded. If true, Bitcoin and other currencies could become the world's first global cash standard.
As bright as the future of cryptocurrency may be, there have been some issues that make investors take pause.
By issues, I mean both security issues and privacy issues. Since it's a digital ledger-based currency, there's a lot of overt use that could potentially cause issues if transactions were to be tracked.
Additionally, hackers have been known to steal large amounts of cryptocurrencies fairly easily. A single data breach could lead people into poverty.
Government regulation has curbed a lot of blockchain technology's potential.
That being said, not everything is rosy for cryptocurrency's future. Government intervention has caused a number of countries to outlaw the mining and use of blockchain-based currencies.
China has already clamped down on Bitcoin mining, citing environmental concerns. The same has happened in Maine, too. In both India and Pakistan, cryptocurrency use has been strictly banned.
It's not entirely sure what the future of cryptocurrency will be, but it's safe to say that the future is going to be a wild ride.
Cryptocurrency is a breakthrough on both a tech and social level. Assuming that it stays legal, it very well could become the de facto way to pay for everything. If it's banned, though, it could easily become one of the greatest "what if's" in history.