A cryptocurrency is a digital currency that is created and managed through the use of advanced cryptographic techniques known as cryptography. Cryptocurrency made the leap from being an academic concept to (virtual) reality with the creation of Bitcoin in 2009.1 While Bitcoin has attracted a growing following in the following years, it has captured a great deal of attention from investors and the media alike. April of 2013 when it hit the record of $ 266 per year. bitcoin after rising 10x in the previous two months.
Bitcoin had a market value of over $ 2 billion at its peak, but a 50% drop shortly thereafter sparked intense debate over the future of cryptocurrencies in general and Bitcoin in particular.2 So these altcoins will eventually replace conventional currencies. and will one day become as ubiquitous as dollars and euros? Or are cryptocurrencies a fad that will disappear in no time? The answer is in Bitcoin.
The future of cryptocurrencies
Some economic analysts predict that there will be a big shift in cryptocurrencies as institutional money enters the market.3 Additionally, there is a possibility that cryptocurrencies will float on the Nasdaq, which would add even more credibility to blockchain and its uses as an alternative to technology conventional. currencies. 4 Some expect all cryptocurrencies they need to be a verified exchange-traded fund (ETF). 5 An ETF would certainly make it easier for people to invest in Bitcoin, but there still has to be demand that they want to invest in cryptocurrencies, the which may not be automatically generated with a background.
Bitcoin is a decentralized currency that uses peer-to-peer technology, which allows all functions, such as currency issuing, transaction processing and verification, to be done collectively by the network.6 While this decentralization frees For Bitcoin from government manipulation or interference, the downside is that there is no central authority to ensure things run smoothly or to support the value of a Bitcoin. Bitcoins are created digitally through a “mining” process that requires powerful computers to solve complex algorithms and process numbers. Currently they are created at the rate of 25 Bitcoins every 10 minutes and will have a limit of 21 million, a level that is expected to reach in 2140.7
These features make Bitcoin fundamentally different from a fiat currency, which is backed by the full faith and credit of your government. The issuance of fiat currency is a highly centralized activity controlled by a nation’s central bank. Although the bank regulates the amount of currency issued in accordance with its monetary policy objectives, there is theoretically no upper limit on the amount of that currency issued. Additionally, local currency deposits are usually insured against bank failures by a government agency. Bitcoin, on the other hand, has no such support mechanisms. The value of a Bitcoin totally depends on what investors are willing to pay for it at any given time. Furthermore, if a Bitcoin exchange is closed, customers with Bitcoin balances cannot resort to recover them.