In today’s fast-paced, modern world, there is hardly any sphere of life not revolutionized by the touch of digitization. From how we study to what we eat or buy, everything has refashioned to fit growing technological innovation.
Money is one of the many such examples.
How we view money has changed thanks to the growing popularity of cryptocurrency. Cryptocurrency is a digital or virtual currency that is known for its decentralization, meaning that there is no central authority to control it. An example of one of the first cryptocurrencies is Bitcoin.
What is Bitcoin?
Created in 2009 by Satoshi Nakomoto, Bitcoin is a digital currency that uses peer-to-peer technology. This means that anyone can send or receive money to another person without the involvement of an intermediary.
As of today, Bitcoin price is valued at $57,795 according to Coindesk.
Bitcoin’s popularity can be asserted to businesses and individuals using this as a form of payment as opposed to physical or digital money. They use it because Bitcoin has value and operates within a secure system of blockchain technology.
According to Investopedia, Bitcoin traded at $60,000 in March 2021. Big banks such as Goldman Sachs have started to open Bitcoin accounts. It has become the currency of choice for trade on an international level. Companies such as Tesla and Paypal have also bought stocks worth of Bitcoin.
All of this would indicate that the future of Bitcoin is not bleak.
So, is There a Future?
The biggest problem that will decide the fate of this crypto is whether it is a store for value or it is medium of transactions.
The biggest issue of it is its convertibility as a store for value. For example, you have some worth of Bitcoin whose value is decreasing and you want to convert it into your local currency. There is no guarantee that you will be able to convert it since it may not match the price you want to sell it at.
This is because Bitcoin is not as recognized and acceptable as gold. Experts say that because gold is accepted worldwide and can be converted easily anywhere in the world, it may remain popular.
Secondly, security issues are also a major deciding factor for the future of this cryptocurrency. While the transactions are anonymous and people cannot be traced, this feature makes it more prone to hackers and criminals.
Finally, since it is decentralized, there is no way that changes can be implemented into this cryptocurrency. Hence, it becomes a purely subjective activity that is ultimately done by governments; making it a traditional currency.
Experts don’t see a future in which Bitcoin thrives unless these issues are resolved. Interest in it is piquing but whether it will fully replace traditional money or not is still in question.