So what is the future of cryptocurrency? We’ve all been hearing about it non-stop on the news. And since the rise of Bitcoin back in 2017 – so much has already changed.
Many people’s lives have been made richer because of a few smart investments, ownership over digital creations has finally been achieved, and our financial systems have already been impacted. But where is all of this going? And is crypto really going to stand the test of time?
Let’s find out.
Crypto first became recognized back in 2017 when the Great Recession hit, sending the entire American and global economy into a downward spiral. And after this, an anonymous person or team by the name of Satoshi Nakamoto wanted to create a solution to the flawed financial systems we all depended on. So, he created Bitcoin. He built the Bitcoin blockchain (a digital version of a ledger) that was a unique financial system that hosted this digital, never-seen-before currency: cryptocurrency.
This blockchain system was created as a completely public, decentralized and nearly un-hackable system to track, host and share cryptocurrency without needing a middleman or a bank. The entire thing was run and regulated by the people, and transactions are approved and recorded by specific Bitcoin-holders called “miners”. For a more in-depth, beginner explanation of the blockchain, check out our post here.
But in short: miners are random people from all over the world who own incredibly powerful computing technology and use it to “mine” cryptocurrency. This means that they are required to solve complex math problems using their computers, in order to “mine” or bring more Bitcoin onto the market.
But by doing this, they are also verifying transactions and adding them to the blockchain. This is how the system is kept up and running – and how it’s kept truthful. After all, they are incentivized because if they successfully verify transactions and do the work, then they are paid in Bitcoin.
This system is known as a “proof-of-work” where transactions are approved and posted by miners, and done through using a lot of energy and computing power.
But the best part about the blockchain as a whole: it’s entirely decentralized and built on a majority-wins system. Meaning everybody who owns Bitcoin can see the transactions that miners record on the blockchain, and if they see an error – they won’t approve it. Then, the “block” or recorded transactions, won’t be added to the blockchain.
This was an attempt at creating a decentralized system where banks and central authorities wouldn’t control the fate and outcome of our lives and finances. This way, something like the Great Recession would never happen again.
And to a certain degree, in many people’s eyes, it’s followed through on its promise.
From letting people all around the world participate in the economy, to inspiring technology like NFTs that have allowed artists and creators online to finally get compensated and recognized for their work just as physical artists do – cryptocurrency has opened up a new world of possibilities for everybody.
Now, people all over the world are creating their own coins, blockchains and systems – and it’s expanded into far more than simple currency.
It’s inspiring a foundation that will make up the next iteration of the internet.
Especially since 2021, there has been a huge spike in popularity for cryptocurrencies and NFTs. Many die-hard fans are investing millions into coins they believe in, and are making millions more in return.
Meanwhile others have nearly lost everything by making too many poor investments.
As of today, there’s not much regulation around cryptocurrency – but it’s being recognized and used on a global scale. As of writing, there are over 10k different cryptocurrencies on the market today including Bitcoin. Different cryptocurrencies are being accepted as payment by some of the world’s largest brands including Amazon, PayPal, Etsy, Chipotle and more.
So…it’s safe to say that it’s already pretty big.
With the space moving so quickly, it’s hard to tell what crypto has in store moving forward, and where the technology will be in the future. But we can make some educated guesses based on trends that you see happening today, and discussions happening within different communities. But based on where it is now, here are 6 future predictions for the future of cryptocurrency:
It’s highly likely that sooner rather than later, there’s going to be a lot more government regulation over cryptocurrencies.
President of the United States, Joe Biden, already issued new regulations that would impact cryptocurrencies to help make them safer and more equitable for investors. You can read the whole announcement here.
There are already several countries that have developed their own digital coins to be used in place of fiat currency. Countries are creating their own “stable coins” meaning their digital coin is valued equivalently to $1 of their regular national currency. Implementing this type of currency means that transactions are sped up, and there is more accessibility for people to participate in the economy if they don’t have a bank account.
Cryptocurrency is already being offered as a method of payment across thousands of different companies and brands – over 15,000 in fact. As more people start to become holders of Bitcoin, more and more brands are going to start accepting it as an alternative method of payment.
Not only does it show they’re forward thinking, but it also opens up their products and services to an entirely new market.
Similarly to how brands will start accepting payment by crypto, we also might start to see the growth of crypto rewards systems. This gives brands a way to connect with customers, and give out rewards tokens that can be used in more ways than one without deteriorating in value.
Some companies have already adopted loyalty incentive programs and are using crypto rewards programs to bring in more customers – and the number of brands doing it will only continue to grow.
It’s no secret that Bitcoin was built on an energy-intensive system that is having negative repercussions on the environment and sustainability efforts that we’re trying to implement.
Particularly with crypto mining using the “proof-of-work” framework – that requires tons of computing power to verify transactions and record them on the blockchain – is costly both financially and environmentally.
So as cryptocurrency grows and becomes more mainstream, sustainability is going to be a primary concern for blockchain developers. And we’ll (hopefully) be seeing a shift to more sustainable and scalable models – like proof-of-stake for example – to run blockchains.
It’s no secret that there are thousands of coins on the market today that aren’t going to stand the test of time.
Many coins are created on a whim without a real essence of value or community behind them, and they lose value.
But in reality, Bitcoin and Ethereum are huge coins in the space and are likely to stick around as main players for a long time, while other smaller coins are likely going to die out. And in the long run – only the ones with the largest amount of reputation and community are going to be valued on a global scale, meaning the massive volume of coins we see today is probably going to shrink.
Many people say “crypto is the future” but what does this truly mean?
Is it really going to be the future of our financial systems, and replace the way we use money entirely?
Every person has a different answer to this question – and it’s hard to tell. But it’s looking like Bitcoin in particular, will most likely hold value for a very long time. And as long as there is an engaged community around the space, cryptocurrency is here to stay.
Now, this is not to say that all financial systems across the globe will entirely bow down to the new king Crypto – but it does mean that it will have an influence over how much power we give financial institutions going forward, the ownership over finances, and the empowerment of the individual in the economy.
So…Final answer: what is the future of cryptocurrency?
Nobody really knows – it looks like we’ll just have to wait and see.
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