Hundreds of years ago, people survived by trading goods they produced and services they offered in exchange for what they required to live. It was a barter system that worked, and no one ever imagined the world could operate differently. Then, along came money and there were sure to be nay-sayers who believed it wouldn’t take off. Now, in the 21st century, we couldn’t imagine a life without notes and coins.
The same concept applies to cryptocurrency. When Bitcoin first hit the market in 2009, there were plenty of people who thought it would never be worth anything. After all, how could something you can’t touch or see hold value? There is now an abundance of cryptocurrencies and blockchain networks available, and more and more people are deciding that yes, cryptocurrency does hold value and does have its place in our society.
However, there are just as many people who don’t see a future for the concept of digital currency, even though governments and major corporations are jumping aboard the bandwagon to see what might happen. For those who have made a living out of trading in cryptocurrency, using and developing blockchains, and utilizing the many different smart contracts, they have an entirely different opinion on the matter.
From many different experts, a common theme appears. Therefore, we’ve included the most commonly expected future for cryptocurrency and what it can mean globally.
Cryptocurrency to Replace National Currency
Those who thought they could foresee the demise of Bitcoin and other cryptocurrencies may soon change their tune once they realize it has firmly established itself in our daily life. Author, expert, and futurist Thomas Frey believes at least a quarter of all national currencies will be displaced thanks to the impact of cryptocurrency. While it may not topple the more firmly established Yen, Euro, and Dollar, it may justaffect those smaller players.
The main reason for this is its efficiency and ease of use. Transactions can take place in just seconds and can be made all around the world without the need for wire transfers. What’s more, with dollar-backed cryptocurrencies such as Tether, you can turn fiat currency into digital currency with a dollar to dollar value.
Governments Don’t Know Where They Stand
How do you begin to control something that is decentralized? It is thought that the uncertainty about reigning cryptocurrency in and gaining control is something that will continue to be a problem facing governments. Some governments such as Canada gain a certain amount of control by actively encouraging its use, while others restrict it, start their own cryptocurrency, or pose an outright ban.
Algeria, Bolivia, India, Ecuador, Nepal, Pakistan, Macedonia, Cambodia, Colombia, Vietnam, China, Russia, Taiwan,and Thailand are just a handful of the many countries looking to restrict its citizens’ access or control its use. However, their reasons for doing so are varied.
Some governments believe cryptocurrency is a way in which people can cheat the system. While regulations have been put in place to ensure users pay tax, and transactions are easy to keep track of, it’s seen as all too easy to evade tax and remain anonymous in the process.
Other governments choose to encourage it by seeing it as an innovation that could be worth their while. However, by doing so, they impose regulations that end up counteracting the original idea: anonymity and decentralization.
Many governments, however, see cryptocurrency as a way in which to cut all ties with banks and financial intermediaries which can be detrimental. With peer-to-peer transactions, savvy investors can cut all relationships with both banks and their financial advisers.
It’s Cash, But It’s Not
Experts have been throwing two different opinions into the public arena regarding its place in the world. Some see it as a cash substitute, while others believe it’s more likely going to work harmoniously alongside cash as an alternative rather than a replacement. While cryptocurrency can be easier to use thanmoney, many governments and financial institutions throughout the world see it is an asset rather than cash. Therefore, when you sell it on, you’re technically selling ownership of an asset. It’s almost like being in the real estate market,but without a physical itemthat you can touch.
If it’s continued to be identified as an asset rather than currency, there’s thought to be only a slim chance that it would ever make its way into supermarkets and department stores as a preferred payment method. Of course, over 100,000 merchants worldwide accept it as valid payment, but it’s typically for big-ticket items such as luxury cars and accommodation.
Experts that predict it to supplement cash rather than replace it could be right on the money. Let’s imagine Bitcoin price was $300, and you bought $300 worth of groceries. When you transferred ownership of your single BTC, you walk to your car and see that it has lost 50 percent of its value. The grocery store now has $150, but gave you $300 worth of groceries. It’s a substantial risk to take, and not one that is likely to take off for smaller purchases. This leads to the next prediction, its value.
Its Value Will Always Change,But the Market Won’t Crash
As this is written, a type of cryptocurrency is dramatically increasing in value, while another falls. One investor is losing thousands of dollars, while another is making just as much. That is the reality of cryptocurrency now, and this is expected to be the future reality as well. Just like the stock market, the cryptocurrency market is very fluid.
While many experts predict one crash after another, there are just as many who believe it’s important for investors to just roll with the punches. It’s also important to remember that even if you panic and withdraw your funds, you can place them in a dollar-backed digital currency such as Tether, ready to reinvest when the value looks a little more favorable. The critical key message to take away from cryptocurrency is that one minute you can be a millionaire, and the next you can have just a few coins rattling around in your digital wallet. Cryptocurrency investment is a long game, but it’s not one that has an end result in sight.
The future of cryptocurrency has been predicted with many different outcomes including overtaking national currency, failing completely, and causing governments to impose restrictions. While all of these potential outcomes are valid, we never truly know what the future holds until we get there. For now, continue to invest wisely, watch live market prices, and be in it for the long game. Cryptocurrency is here to stay.