FUTURE OF CRYPTOCURRENCIES
Cryptocurrency is a digital currency that is created and managed by using an advanced encryption technology called encryption. With the creation of Bitcoin in 2009, Cryptocurrency has leapt from academic concepts into (virtual) reality. Although bitcoin attracted more and more followers in the following years, it attracted a lot of attention from investors and the media in April 2013, when it reached a record $ 266 per dollar at the time, soaring 10 times After bitcoin. Bitcoin’s market value was more than $ 2 billion in its heyday, but it plummeted 50% shortly thereafter, sparking a heated debate about the future of cryptocurrencies in general and Bitcoin in particular. So will these alternative currencies eventually replace traditional currencies and one day become as common as the US dollar and the euro? Or will cryptocurrencies quickly become popular? The answer lies in Bitcoin.
The future of cryptocurrencies:
Some economic analysts predict significant changes in crypto technology as institutional funds enter the market. In addition, cryptocurrencies may be listed on the Nasdaq, which will further increase the blockchain’s credibility as an alternative to traditional currencies. Some predict that all cryptocurrency needs is a proven exchange-traded fund (ETF). ETF will undoubtedly make it easier for people to invest in Bitcoin, but there is still a need to invest in cryptocurrencies, and some people say that cryptocurrencies may not be automatically generated by funds.
Bitcoin is a decentralized currency using peer-to-peer technology, which enables the network to perform all functions such as currency issuance, transaction processing, and verification. Although this decentralization keeps Bitcoin from being manipulated or interfered with by the government, on the other hand, there is no central authority to ensure that things go smoothly or support the value of Bitcoin. Bitcoin is created digitally through a “mining” process that requires powerful computers to solve complex algorithms and crunch numbers. They are currently created at a rate of 25 Bitcoins every 10 minutes and have a ceiling of 21 million, which is expected to reach this level in 2140.
Fiat currency issuance is a highly concentrated activity supervised by the National Central Bank. Although banks regulate the amount of money they issue in accordance with their monetary policy goals, there is theoretically no upper limit on the amount of money they can issue. In addition, government agencies often provide bank failure insurance for local currency deposits. On the other hand, Bitcoin does not have this support mechanism. The value of Bitcoin depends entirely on the price investors are willing to pay at a certain point in time. Similarly, if the Bitcoin exchange goes down, customers with a Bitcoin balance will not be entitled to recover it.
Bitcoin future outlook:
The future of Bitcoin is the subject of much debate. Although the media is being proliferated by called cryptocurrency cyisis, Harvard Professor of Economics and Public Policy Kenneth Rogoff said that the “overwhelming sentiment” of cryptocurrency advocates is that in the next five years, crypto The total “market value” of a currency may explode. , Rose to 5-10 US dollars (mega). ”
He said the historic volatility of asset classes was “no reason to panic.” Still, he is optimistic about optimism and Bitcoin as a “crypto evangelist” of digital gold, calling it a “nut” and noting that its long-term value “is likely to be $ 100, not $ 100,000. ”
According to Rogoff, unlike physical gold, Bitcoin’s use is limited to transactions, which makes it more vulnerable to a bubble-like collapse. Furthermore, the energy-intensive verification process of this cryptocurrency is “significantly less efficient” compared to systems that rely on “trusted central institutions like central banks”.
The main benefits of Bitcoin’s decentralization and transaction anonymity have also made it the currency of choice for several illegal activities, including concealing, drug traffic , smuggling and arms procurement. This has attracted the eye of strong regulators and other government agencies, like the Financial Crimes Enforcement Network (FinCEN),
the SEC, and even the FBI and the Department of Homeland Security (DHS). In March 2013, FinCEN issued rules defining virtual currency exchanges and administrators as currency services businesses, placing them within the scope of government regulation. In May of that year, the Department of Homeland Security frozen Shan’s accounts. Gox-the largest Bitcoin exchange-held at Wells Fargo, claiming it violated anti-money laundering laws. In August, the New York Department of Financial Services issued subpoenas to 22 emerging payers.