Cryptocurrency is, pretty much, what we refer to as virtual currency. It is a type of digital funding that is secured and managed with the help of cryptography, which, needless to say, is a very advanced system of encryption.
Cryptocurrencies first made themselves known almost a decade ago. The first type to come out was Bitcoin, which surged in popularity. Its popularity led to the creation of several competing variants not long after. In fact, hundreds of alternative options, also known as “altcoins”, soon became a part of the cryptocurrency landscape.
Bitcoin’s patrons are the largest and this led to the cryptocurrency gaining some attention a few years after its inception. However, it fell directly under the scanner only in the spring of 2013 when prices went as high as $266 per coin. This was a massive increase compared to where the figures were at just a few months prior.
But, it didn’t stop. Bitcoin eventually peaked at $2 billion. Though it dropped by 50% later, the value was still high enough to create interest on a global scale regarding the future of cryptocurrency in general.
The main question is if mankind can move towards a world where physical money ceases to exist and gives way to digital money that can be traded online. If this is possible, what should we expect?
The cryptocurrency that pretty much sets the standard right now is Bitcoin. So, if we need to understand the future of cryptocurrency as a whole, we need to look at Bitcoin. Bitcoin exists on a decentralized network involving peer-to-peer interactions. All functions are carried out by this network. This includes everything from issuing the currency to verifying the transactions that take place.
The currency itself is produced by mining, where users on the network solve cryptographic puzzles to validate transactions. As an incentive of solving these puzzles, the users are paid Bitcoins. So, as you can see, the main difference between fiat currencies and cryptocurrencies is that there is no centralized authority overseeing things. Cryptocurrency based transactions are supervised by a network of users (miners).
But, the decentralized approach and the anonymity are exactly what’s drawing in the negative attention. You see, Bitcoin is being leveraged by criminals to carry out illegal activities anonymously. This includes drug peddling, smuggling, and money laundering etc.
Now, at first, it might seem like cryptocurrency is risky. However, you cannot deny that it is still extremely secure and regulated. Though there is bound to be some misuse initially, improved safety mechanisms will continue to be developed.
This will only make cryptocurrencies more secure and stronger against misuse. As for public acceptance, it’s already happening. Many people have started trading in cryptocurrencies. That’s why you have sites like buyandtradecrypto.com.
So, the potential is undeniable. Mainstream viability is only a matter of time.
The current debate only focuses on the issues of crime and the sheer amount of electronic resources needed to run cryptocurrency networks. But, as stated earlier, the constant evolution of technology will only make things better.