Lately it seems that everywhere you turn there are news articles and chatter about crypto and what the future may hold for it. For many, that “funny internet money” is still a mystery and yet slowly, it is garnering more favor and mainstream adoption.
As more people begin to comprehend that it’s not going away and this may really be the future of money, they are asking questions about use cases and the technology behind it even to the point where government bodies are looking into developing their own centralized cryptocurrency.
[wlm_private “Crypto Trader Pro – Monthly|Crypto Trader Pro – Yearly|Crypto Trader Pro (Lite)”]
While this is not a comprehensive guide to what crypto is or all use cases for crypto, this will help you understand the basics of cryptocurrency and how it is being incorporated into our everyday lives moving forward. But first, to see where it’s going we need to understand the history.
Brief Understanding of Cryptocurrency
In January 2009, the very first cryptocurrency was mined. This was Bitcoin and it was created by a person (or persons) who call themselves Satoshi Nakamoto. Briefly, cryptocurrency is a digital asset that is used for a medium of exchange. It uses robust cryptography and smart contracts to secure financial transactions. And while most people believe that cryptocurrency and blockchain are one and the same, they are not.
Blockchain is the permanent ledger for all transactions while cryptocurrency is a vehicle that uses the blockchain to do business.
Developers saw that Bitcoin was going to have a problem with scaling so over the years many new blockchains have been in development. Some of the popular alternative blockchains are Ethereum, Litecoin, Ripple, and EOS; each with their own token.
One of the main draws to cryptocurrency is the decentralized aspect to most of them. They are not controlled by any one centralized organization and there are no single-point failures that could bring down the network. This has put crypto in the sights of government agencies who seek to regulate and control all monetary systems. Truthfully, there are arguments to both sides of that, but we’ll save that for another article.
The volatility of Cryptocurrency
As mentioned earlier, Bitcoin was the first and more often than not, people interchange the word cryptocurrency with Bitcoin, and understandably so. Bitcoin is considered to be the granddaddy of cryptocurrency and often referred to as the “gold standard” of cryptocurrency.
Bitcoin did not come out of the gate as a valuable token. You may have heard the pizza story. In May 2010, a man bought two pizzas for 10,000 Bitcoin. At the time, it was only worth about $30. With today’s prices, he would have paid just over $83 million for some Papa John’s pizza. And in December 2017, Bitcoin reached a high of nearly $20K.
Volatility in price is not limited to Bitcoin. In fact, all of the altcoins have seen their ups and downs. And with the lessons being learned as we navigate through this next generation of tech and money, different types of tokens have been created like stablecoin and all-in-one coins.
Easy transfers
One of the really beneficial things about cryptocurrency is the ease from which one can transfer funds directly between two parties without the need for a third party medium. Crypto technology has comfortably eliminated the need for the middle man and enhanced P2P transfers that rarely exist in traditional fiat payment systems.
Transfer of funds is done with little or no processing fees, empowering users to avoid the high transaction fees charged by conventional financial institutions and banks for wire transfers. For example, in September 2019, someone transferred 94,504.1 BTC to a wallet, roughly $1 billion in Bitcoin, and only paid 0.06534852 BTC in fees, which was less than $700. You’ll never see low fees like that on Western Union or MoneyGram services!
What’s The Future For Crypto?
There are several ways we can go about looking into the future for cryptocurrency so we’ll highlight the most important ones.
Price
Bitcoin is finite, meaning there are only so many that will ever be mined into existence. After that, we suspect that each Satoshi will rise in value. But there are other projects launching cryptocurrencies; some with finite tokens and others who don’t allow mining but may create or burn tokens in order to maintain a stable price. Really, there is a whole plethora of tokens and each are unique in function.
With the development of new crypto tokens there will be a lot of choices, but if you’re looking at the top coins by market capitalization, many predict that, despite volatility, they will increase in value.
Despite not reaching or surpassing Bitcoin’s all-time high price of $19,783.06 in December 2017, many financial analysts are predicting growth in value over time. Chris Dixon, an American internet entrepreneur and investor believes that Bitcoin could eventually be worth as much as $100 million. Certainly a bold and over-the-top prediction, but some will argue that it’s cryptocurrency – really, anything is possible.
Acceptance
For year, the idea of mainstreaming cryptocurrency was laughable. The only ones paying attention to it were the developers and tech geeks, or investors with wild visions of a new world economy. Now look around! Facebook is developing Libra, JP Morgan has JPM Coin, Ripple is making strategic partnerships with major banking enterprises, and governments like China, Venezuela, India and Iran have already, or are in the process of launching their own government-backed cryptocurrency.
Big businesses are adopting cryptocurrency for AP/AR, as are local governments for tax payments, and even sports are adopting cryptocurrency with some pro players trying to add crypto into their contracts or using cryptocurrency, like the Miami Dolphins, to buy 50/50 raffles at their games.
Government scrutiny
Government will play a large role in the future of cryptocurrency and this is a dividing issue with a lot of people. Some believe that government only wants to keep their hands in your pocket and regulate how you spend and what you earn; others believe that regulation is necessary to keep the public safe.
Facebook is a great example of a company trying to launch an independent cryptocurrency to benefit the unbanked and under served, but the U.S. Congress is really scrutinizing Libra because, by association with Facebook, they are concerned about privacy and safety issues that come with catering to Facebook’s billion-plus users.
Naturally, government and sovereigns will look upon true cryptocurrencies with a jaded eye because they would be on the same level playing field as anyone else who wishes to use crypto. Regulation goes against the fundamental premise that launched the idea of Bitcoin a decade ago.
Money 4.0?
If you look at the history of money, we really started giving things value with the concept of bartering. Let’s call that Money 1.0. From there we moved to Money 2.0 using commodities like ancient shekels and gold. Money 3.0 evolved into representative money, like the paper money sitting in your wallet or loose change in your car.
Cryptocurrency is Money 4.0. It is a medium of exchange and its value is going to be determined by market causation and mainstream adoption. Governments will push back on the technology until they can figure out how to profit from it.
What cryptocurrency looks like today will certainly be different ten years from now, but one thing is clear – Pandora’s box is open and there’s no going back.
[/wlm_private]
Want to read the rest of the article? Join our pro-membership and receive all of the following:
✅Access to ALL content.
✅Access to the CTN editorial staff.
✅Access to our CTN trading dashboard.
✅Access to our exclusive telegram channel where all our pro-members and editorial staff are in.
✅Ability to request content/research material!
