Ever since cryptocurrency gained some prominence in 2016 and had its first significant fall in 2018, people started to distance themselves from it. But with a sudden breakout earlier this year, there has been a lot of speculation surrounding its future. Backed with the powerful and dependable blockchain technology, cryptocurrency is a digital currency created and managed through cryptography. Academically, founded by a programmer or, more likely, a group of programmers who goes with the pseudonym, Satoshi – Cryptocurrency gained prominence with the introduction of Bitcoin in 2009. With many ups and downs, the cryptocurrency had in the past decade, there is often speculation about the future hold for cryptocurrency.
Cryptocurrency for over a decade remained under a radar where people barely paid attention to it. However, with what went down in Wall Street and the subsequent meteoric rise in the Gamestop stocks in January. In 2021 the world started siding with this digital currency. Also, the social media presence of Elon Musk, founder of Tesla, backing Dogecoin, a form of cryptocurrency, openly pushed its prospects further beyond anyone's imagination. As a result, various forms of cryptocurrency witnessed record-breaking jumps in their valuation, including the OG Bitcoin. Bitcoin jumped 10 fold its market value in 2021 from where it stood in April 2013. Notably, tech giants like Apple started considering it as a mode of transaction.
Before we get into what the future holds for cryptocurrency, let's look at why it succeeded in the first place. The foremost reason for the increased popularity of cryptocurrencies came from the various shortcomings and loopholes of the existing financial systems. With the rising economic crisis and the constant increase in interest rates, people were expecting an alternative. Cryptocurrency received that advantage for two prominent reasons.
One, the cryptocurrency ensured high levels of transparency and accountability. Second, it allowed people to be their bank. Besides, the accessibility to the ordinary people also significantly increased its popularity and usage simultaneously. It turned out to be the exact thing that can challenge the existing currency competition, the international monetary system, and the government's control on the issued public money.
Everything was sunshine and rainbows in the crypto-market since the Gamestop-Wall Street Saga until one fateful day. The crypto market crashed and plunged to as low as 50 percent of its various forms, including the Bitcoin. As a result, the media and the market going gaga and merry over the prospect of cryptocurrency to become the future of money tuned their tones. The crash sparked a raging debate about the future of cryptocurrency. The market was ripe with speculations of what the future holds for cryptocurrency. Its volatility was exposed, and people had questions. Will cryptocurrency ever become as ubiquitous as dollars and euros someday? Will it flame out just as quickly as it gained prominence? Does it even have a future?
With the state of cryptocurrency, its success will depend on four conditions – Appropriate Technology, Demand in Consumer, an amenable regulatory environment, and corporate champions.
When it comes to the appropriate technology, viability and adoption is a critical point. Cryptocurrencies have shown to be highly viable amongst the masses and not just the riches. Similarly, publically, it received widespread acceptance as an alternate form of money. Many people were already on the "so-called hype train of cryptocurrency" as the future of money. With enough technicality to protect from hacking activities and transparency quotient, people gave it a go. Besides, the lack of usual trust in authorities and the government made a case for cryptocurrency further stronger.
Cryptocurrency is regarded as a volatile form of investment, and it was proved again by the recent crash in the crypto market. It signals towards one thing, i.e., cryptocurrency isn't for everyone. Since the cryptocurrency doesn't have any central authority and regulatory challenges, the onus of its success and failure largely looms on its ability to deal with issues. Also, it seems people at large have failed to understand the actual value of cryptocurrency. For instance, many have focused mainly on speculative trading that's significantly driven by price and volatility. Apart from this, several countries see it as a conduit for tax evasion and money laundering, thereby questioning its legitimacy and implementation.
If we look at various sectors involved in cryptocurrency, its future will have a significant market share dominated by trading, e-commerce, and retail segments. Also, with restrictions in some countries, cryptocurrency will have difficulty in penetration. However, cryptocurrency has the potential to become the ultimate form of e-payment. Cryptocurrency is powered by blockchain technology, and other financial institutions are also directed to blockchain technologies. As a result, the financial market ecosystem could go under massive disruption for better or worse because of cryptocurrency.
One of the many reasons behind cryptocurrency popularity is anonymity. For the future of cryptocurrency as an alternative, it will have to meet other criteria as well. It should be able to prevent fraud and hacker attacks comfortably. Simultaneously, its technicality should be easy enough for consumers to understand. To maintain adequate safeguards and protection, it will need the backing of a decentralized network, which will be a considerable challenge. It's where the corporate champions will benefit and enable themselves to have the largest share in the crypto market.
Considering every aspect of cryptocurrency, it is incredibly tricky to predict the future of cryptocurrency. It has the potential to be both good and evil with the lack of regulatory bodies. It hands the masses control over their money but simultaneously will risk the increase in cybercrime or cyberattacks. As a whole, the future of cryptocurrency will largely depend on people's willingness to see it as one. Besides, it will have overcome several hurdles without compromising the fundamental premises of its existence. So, for now, the answer would be to wait and see what the future holds for the future of cryptocurrency.
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A lone wolf by definition, a writer by heart, and a lost star with ambitions to light up the dark both inside and around me, sometimes by immersing myself into books or video games or traveling with a backpack to an uncertain destination believing that life is all about the choices we make and we don't.