Thousands of years ago humans used shells as money. With the flow of time, we have seen myriads of currencies come and go. Today we use fiat currencies like dollars and euros. What is the future money? This question has intrigued millions around the world. As we have entered a world ruled by technology, no prize for guessing the future currency will have a very strong technological base. Many people consider cryptocurrency as a viable alternative to fiat currencies, many people don’t.
Cryptocurrency, as the name suggests, is based on cryptographic encryption. The encryption is designed to protect the network. The term Blockchain is closely associated with cryptocurrency. It is in fact, the underlying technology for cryptocurrency. Blockchain works as a public ledger and records transactions digitally.
Cryptocurrency became a real thing with the advent of Bitcoin in 2009. Before that, it was just a concept. In subsequent years, Bitcoin gained popularity among enthusiasts. In 2013, the price of a single Bitcoin reached $1000 and this event brought cryptocurrency in the limelight. Though Bitcoin is by far the most popular cryptocurrency, there are some alternatives like- Litecoin, Ripple, and Ethereum.
In this digital age, we need everything instantly. Perhaps this is the most beneficial aspect of cryptocurrency. Everyone can access his digital wallet instantly and there need not be any person involved. Privacy is also a very important aspect of Cryptocurrency as cryptographic techniques are used to provide users anonymity. A report from Investopedia suggests that Steep reductions in settlement time and efficacy could save consumers $16 billion annually. Blockchain is a highly secured network and so the security of cryptocurrency is not supposed to be an issue.
Cryptocurrency terms can confuse people and sometimes those can be hard to comprehend. Even though young people can learn those easily, it will take time for older people to get comfortable with those. The rate of cryptocurrencies, especially Bitcoin fluctuates a lot. Many people may deem it risky to have cryptocurrencies. One of the biggest disadvantages of cryptocurrency is that there’s no central governing authority and so it makes money laundering very easy. Cryptocurrency is used to buy illegal things from the Dark Web. Using cryptocurrency for the payment of illegal goods is increasing day by day. There’s a chance of losing one’s Digital Wallet. Without the wallet, the money could not be retrieved. With the inception of every new tech, there are new scammers waiting for an opportunity. Cryptocurrency users also face such threats.
Many investors are putting their money on cryptocurrency, on the other hand, some prolific investors are not convinced with the idea. One of the most successful investors of all time, Warren Buffet once said ‘Cryptocurrencies have basically no value and they don’t produce anything.’ Cryptocurrency is not backed by anything nor do they have any intrinsic value. If cryptocurrency really becomes a part of the mainstream financial system in the future, it would have to satisfy various criteria and gain the trust of the world leaders.
No one can bet if we’re really going to see a ubiquitous cryptocurrency revolution. That said, considering the benefits they offer, no one should discount the possibility either.