What is the Future of Cryptocurrency

What is the Future of Cryptocurrency

What is the Future of Cryptocurrency

As institutional money begins to join the cryptocurrency market, several economic professionals believe that the market will undergo a significant shift. Furthermore, there is a potential that cryptocurrency would be listed on the Nasdaq, which would further establish the legitimacy of blockchain and its applications as a viable alternative to traditional currencies. What is the Future of Cryptocurrency

Some believe that all cryptocurrency need is an exchange-traded fund that has been vetted (ETF). An exchange-traded fund (ETF) would undoubtedly make it simpler for consumers to invest in Bitcoin, but there still has to be a demand for cryptocurrency investments, which may not be automatically produced by a fund.

What is the Future of Cryptocurrency

What is the Future of Cryptocurrency

Bitcoin: What You Need to Know

In contrast to traditional currencies, Bitcoin is a decentralized currency that makes use of peer-to-peer technology, which allows the network to perform all activities, including as money issuance, transaction processing, and verification, collectively. Even though Bitcoin’s decentralization makes it immune to government manipulation and meddling, it also means that there is no central authority to guarantee that things function smoothly or to back the value of a Bitcoin. What is the Future of Cryptocurrency

Bitcoins are produced digitally via a process known as “mine,” which necessitates the use of powerful computers to solve complicated algorithms and crunch large amounts of data. They are presently being manufactured at a pace of 25 Bitcoins every 10 minutes, and the total number of Bitcoins available will be limited at 21 million, which is scheduled to be achieved in 2140.

As a result of these qualities, Bitcoin differs fundamentally from fiat money, which is backed by the full confidence and credit of the issuing government. Fiat currency issuance is a highly centralized operation that is regulated by the central bank of a certain country. While the bank restricts the quantity of currency that may be issued in line with its monetary policy goals, there is no theoretical upper limit to the amount of money that can be issued in this manner. What is the Future of Cryptocurrency

Furthermore, deposits in local currency are often protected against bank collapse by a government-sponsored organization. On the other hand, there are no such support systems for Bitcoin. When it comes to the value of a Bitcoin, it is entirely reliant on how much money investors are prepared to pay for it at any one moment. In addition, if a Bitcoin exchange goes out of business, customers who have Bitcoin balances have no recourse for recovering their funds. What is the Future of Cryptocurrency

 

Bitcoin’s Long-Term Prospects

Bitcoin’s long-term prospects are the topic of considerable discussion. While so-called crypto-evangelists are proliferating in the financial media, Harvard University Professor of Economics and Public Policy Kenneth Rogoff claims that the “overwhelming sentiment” among crypto supporters is that the total “market capitalization of cryptocurrencies” will “explode over the next five years, rising to $5-10 [trillion].”

According to him, the historical volatility of the asset class is “no cause to worry.”. Nonetheless, he restrained his excitement, as well as that of the “crypto evangelists,” seeing Bitcoin as digital gold, describing it as “nutty” and suggesting that its long-term worth is “more likely to be $100 than $100,000.” What is the Future of Cryptocurrency

Because Bitcoin is used just for transactions, rather than as a store of value, Rogoff contends that the currency is more susceptible to a bubble-like collapse than actual gold. Furthermore, the cryptocurrency’s energy-intensive verification method is “vastly less efficient” than systems that depend on “a trusted central authority, such as a central bank,” according to the study.

What is the Future of Cryptocurrency

Increasing the Level of Scrutiny

Bitcoin’s primary advantages of decentralization and transaction secrecy have also made it a preferred currency for a wide range of criminal operations, including money laundering, drug trafficking, smuggling, and weapons acquisition, to name a few.

In response, major regulatory and other government organizations, including as the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and even the FBI and Department of Homeland Security, have taken an interest in the matter (DHS). Financial Crimes Enforcement Network (FinCEN) announced guidelines in March 2013 that categorized virtual currency exchanges and administrators as money service organizations, placing them within the jurisdiction of the government. What is the Future of Cryptocurrency

The Department of Homeland Security (DHS) froze an account of Mt. Gox – the world’s biggest Bitcoin exchange – that was housed at Wells Fargo in May of that year, saying that it violated anti-money laundering regulations. In addition, the New York Department of Financial Services sent subpoenas to 22 developing payment businesses, many of which dealt with Bitcoin, in August, requesting information on their policies and procedures for preventing money laundering and protecting consumers.

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