Cryptocurrency! A digital currency brought up by the use of cryptography. It all started with the launch of BITCOINS in 2009. Since then, the growth has been tremendous. Thus, the Platform is all set for cryptocurrency to grab up all the money market. As we discussed in the previous article on cryptocurrency – LIBRA, will also play major role in this model. Why are cryptocurrencies the future? This wouldn’t remain unanswered.
So, what’s your vision on Why are cryptocurrencies the future? If cryptocurrency turns up at the top in the future, will it be able to cover up the devastating difference between Indian currency and dollars, euros, etc?
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As of today, 29th August 2019, Values of all the cryptocurrencies are plummeting at a very high pace. So much so, Bitcoin is at about $9,600 which is much below the critical point of $10,000. Further, the biggest hit has been experienced by TRON, seeing a droop of 11% in its value. See here.
Apart from them, Etherium also lost about 8% of its value in a single day. Just these numbers are enough for anyone to understand that staying away from cryptos is an intelligent thing to do. But, here is the thing, we need to understand why cryptocurrencies, that once made many people millionaires overnight, are seeing their doom.
The rise and the fall of cryptocurrencies:
Let us talk about the rise first. The first cryptocurrency ever made was bitcoin. Moreover, most of the other cryptocurrencies use the original code of bitcoin with just little tweaks in it. The cryptos offered the benefits:
- Cryptocurrencies, just like any metal, can be manufactured or “mined” in a specific value called, “roof limit”, hence it acted just like a real currency.
- The roof of a cryptocurrency can’t be changed once it is public.
- The transfers are almost instantaneous.
- The cryptocurrency itself is not hackable, it could only be hacked if someone hacked the computer of the person and not the crypto network could be hacked.
- Cryptography keeps the records of all the currency and hence chances of thefts are almost none.
Apart from the technical jargon, what actually made cryptocurrencies rise was that it made people millionaires overnight. The value of bitcoin jumped from less than $1 to more than $1000 and the highest ever price of bitcoin was just shy of $20,000.
The fall of cryptocurrencies is also termed as the 2018 cryptocurrency crash. After seeing peaking rises in 2017, the crash began in early 2018. The value of bitcoin fell almost 65% in a period of 1 month from 6th January 2018 to 6th February 2018. A similar scenario was with other prominent cryptos and by September 2018, the values of cryptocurrencies almost fell 80%. This made the crash worse than the dot-com bubble’s 78% collapse.
What is the future?
To see the future scope of cryptos, we need to understand what exactly went wrong. The main reason for the fall of cryptocurrencies was lack of governance. Clearly, there was no governance over the use of cryptocurrencies. No one was governing the use of cryptos. The world bank did not even acknowledge cryptos as currencies, this led to the fall. Furthermore, a lot of illegal transactions over the internet and the dark web start taking place using cryptos hence further decreasing the trust factor of the currencies. All these reasons combined staged the fall of the cryptocurrencies.
Many modern economists believe, cryptocurrencies can again transform the world and shape a much digital and financially stable future if some big governing body like the World Bank or the Federal Banks and Reserve Banks of countries start to govern the use of cryptocurrencies. Maybe we are looking at a future where traditional currencies will be completely replaced by digital cryptocurrencies and we ll have a much more globalized world.
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