Cryptocurrencies present the world with opportunities never seen before. They make transactions more manageable and straightforward but are incredibly erratic. No one can discern proper trends and predict future rates when it comes to cryptocurrencies. Similarly, what the future holds for them is also relatively unknown. But there are several theories by those familiar with the crypto world regarding what cryptocurrencies will mean to us in the next few years.
Cryptocurrency: The Past
The concept of cryptocurrencies was once just a theory floating around in the world of academics. It only came into existence a decade ago. Cryptocurrencies make use of blockchain technology in which each transaction data is stored as a block in a massive database. Cryptocurrencies are usually unregulated and provide the user with confidentiality. They eliminate the need for intermediaries and the hassles that accompany money transfer to different countries.
Bitcoin, considered as the major player in the crypto world, emerged in 2009 and gained massive popularity by 2013. The other cryptocurrencies, such as Litecoin and Ethereum, came to exist in the next few years.
Since then, many more kinds of cryptocurrencies have been introduced in the world. With the cryptocurrencies rising and falling in value unpredictably, they have both strong supporters and critics. It is not easy to determine when to invest in a particular cryptocurrency or if you will have a successful investment. Cryptocurrency Market Cap Data indicate that there is no constant value that can be associated with cryptocurrencies.
The future of cryptocurrencies
Cryptocurrencies are incredibly unpredictable, as seen in the data from the past. But there have been speculations made regarding what the future holds for cryptocurrencies.
Introduction of more cryptocurrencies
The prominent names in the crypto world currently are Bitcoin, Ethereum, Litecoin, Ripple, NEO, IOTA, etc. As technological innovation take place, even better currencies will be introduced in the market.
They will consist of complex mathematical formula to ensure better security, but they will also be simple enough to be accessible to ordinary people.
Facebook had introduced its cryptocurrency named Libra to increase the efficiency of international payments. Specialists do not consider this a good move on Facebook’s part and believe that creating its own bank would have been a much better option for Facebook.
More individuals and firms will start using cryptocurrencies.
The use of cryptocurrencies eliminates the need for a middleman in transactions. This can reduce the extra expenses of both business and individuals. They would no longer have to pay an amount to carry out a cash transaction.
Several stores in America already accept bitcoins as a form of payment, and this is only expected to increase in the coming years.
Experts believe that fiat currencies will soon become obsolete and be replaced by cryptocurrencies. The current issues facing cryptocurrencies such as a computer malfunctioning erasing someone’s digital cash or having funds stolen by a hacker could be solved in the future. Increased security and other safety measures could be put in place to make the use of cryptocurrencies more secure and reliable.
Acceptance of cryptocurrencies by Government agencies
The Governments of most countries have not had a favourable attitude towards cryptocurrencies. Unlike traditional forms of currency, cryptocurrencies do not have a centralised controlling authority like a bank. This makes its movements incredibly unpredictable and gives way to illegal activities.
Due to this distinct lack of authority, criminals have found the crypto world to be a safe haven. Crimes like money laundering, smuggling, etc. have been taking place in the crypto world, making it appear even more vicious in the eyes of the lawmakers.
But cryptocurrency enthusiasts believe that soon Government agencies will also shift to cryptocurrencies. The transactions will be extensively documented in the database, and there will be high levels of transparency.
Cryptocurrency in the banking world
The crypto optimists also expect the world of financial institutions to be transformed by cryptocurrencies. They believe that banks too will start operations involving cryptocurrencies, and customers will open up cryptocurrency accounts. ATMs will start providing Bitcoins to those who come in need of money.
Cryptocurrencies will continue to be unpredictable.
Cryptocurrency values can get to an all-time high and an all-time low both in the same year. There can also be drastic changes that happen just in the matter of a few days. Even in the future, cryptocurrencies are expected to continue to be as volatile.
The effects of the pandemic
The Covid-19 pandemic situation did bring down the value of bitcoin considerably, but then it skyrocketed to a large amount. Many experts support bitcoin investments after the pandemic and expect bitcoin rates to reach even more incredible heights.
Experts believe that cryptocurrencies will be much widely accepted in the future. The universe of cryptocurrencies will come to include most sections of the society, including the Government and Banks. Many more cryptocurrencies are expected to emerge and make their mark in the world.