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Future of Cryptocurrency: What is All the Hype About?

Future of Cryptocurrency What is All the Hype About
Future of Cryptocurrency What is All the Hype About

2021 was a big year for cryptocurrency. What is the next step in 2022?

For Bitcoin, multiple new high prices are visible. With that, there were big drops as well in the cryptocurrency. Ethereum has also had its all-new high recently in the U.S. Concerning that, the US government and Biden have expressed huge interest in new regulations for the cryptocurrency. 

The interest of people in cryptocurrency has skyrocketed and this topic is becoming a hot topic with the investors as well as in the popular. This hype is making news as from the kid in your to Elon musk, everyone is talking about it. 

In certain ways, 2021 has been a breakthrough year for cryptocurrency, as cryptocurrency has become a global currency exchange. Crypto industry is the center of attention for many people. However, this industry is on an infant level and it is evolving at a constant level. It is very difficult to determine what will happen to cryptocurrency in the future. 

Cryptocurrency a Power to people?

The investors in cryptocurrency are increasing at a steady pace. This growth is around the world. However, the recent growth is very explosive. The profile of investors has also evolved. During this age, cryptocurrency is a new asset class for consumers. The portfolios are rewarding. 50% of the users of cryptocurrency are comfortable with online shopping. 

In 2018, older consumers have begun to back cryptocurrency at a much faster rate. In the US, the consumers above the age of 35 years or older (47%) are will buy cryptocurrency in the next 6 months. 

For the current and the potential investors, cryptocurrency offers a way to handle the finances. Many people find a way for financial freedom that is liberated because the rigidity of the traditional forms of banking. 

This is a huge benefit for the institutions as well. Recently, many institutions are attracted  of the concept of cryptocurrency. An example of this will be the bitcoin custody service that is created by US banks. This allows hedging funds to take a stake in the digital currency. 

What about the mining of bitcoin?

In 2022, the future of bitcoin is quite different than what was expected. The enthusiast of crypto is not the one who is mining it anymore. In addition, they are also not the only ones who are profiting from its success. The mining has been ringing fenced by a few companies that can provide huge power and electricity to mine at a scale. This makes it difficult for the independent users to mine or to get involved. 

In addition, there are huge jumps because mass corporations such as tesla are making investments in bitcoin on a single day. This also shows the true reality of the democratic market. This was started as a fringe movement and now it has gown corporate as a result of its success. 

Bitcoin: An interest for the government?

Along the corporations being interested in crypto mining. There are government overseers who have also shown interest in crypto as well. Since the invention of cryptocurrency, governments have put in little to no effort in comparison to traditional investments. The cryptocurrency has been allowed to spread as a uniquely decentralized asset. 

The leissez faire attitude of the financing is fading out. The investors are showing supportive behaviour towards the new regulations set. However, there are many conflicting views regarding these policies and who should have the authority to create them. 

The government oversight matters to a lot of investors and many investors believe that there are greater regulations that can legitimize the marketplace. This enabled more businesses to accept digital currencies. This way they increased their value, and were from any fraud. This will also reduce the volatility as well as the crime rate. 

In addition, this is a concern for many people that cryptocurrency regulations could effectively limit the peer-to-peer nature, which was the main reason for attracting initial investors. In addition, the drawbacks of cryptocurrency pose a much larger threat. This threat will not only be on the wallets but also towards the freedom of the individuals. These individuals currently experience a decentralized and anonymous marketplace. 

The truth about this trustless system

Many people consider cryptocurrencies of bitcoin platforms as trustless systems. This is because they are not connected with any kind of government body or nation-state. Many might argue that cryptocurrency is much superior to other physical currencies and they are not dependent on that. 

Grundfest notes that regardless of what an individual thinks, cryptocurrency is not entirely a bad thing. It is based on an infrastructure that powers the cryptocurrency such as bitcoin. Much of this system is located in china. It might be a risk that the Chinese government might make any kind of fundamental changes or impose their will on the data miners who keep it running. 

Is stable coin the answer to your problems?

The stable coin has grown in their popularity as a way to back a cryptocurrency with assets that hold a real value. In a similar way to that of US currency that can be used on the standards of gold. Those assets could be any other currency of commodities, virtually anything. 

There are many issues in this approach. Such as it creates a system that is already in existence. In addition, the people who live in countries that have weak currencies may be better off investing in bitcoin than buying the local stocks or bonds.

The future of cryptocurrencies has a question mark. The critics see that there is only risk in this. People remain skeptical regarding this. However, certain applications show that cryptocurrency is a viable solution. 

PingQuill

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