Cryptocurrencies such as Bitcoin have rapidly gained popularity over the past year, causing their value to rise exponentially. The entire market cap of cryptocurrencies has increased to over USD 250 billion as of this writing. Interest in digital currencies has never been greater, which has led many people to wonder how the cryptocurrency boom will affect our world of finance and business in general. Will cryptocurrencies completely replace fiat currency? Or are they just another fad? What you need to understand about the crypto boom and what it means for the future of your financial situation and prospects.
A digital or virtual currency with security provided by cryptography is called cryptocurrency. Since cryptocurrencies are decentralized, they are not under the jurisdiction of any one government or financial institution. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrency is widely exchanged on decentralised exchanges, and it may also be used to purchase products and services. The “crypto boom” refers to the rapid growth in the value of cryptocurrencies in recent years.
The organic nature of a cryptocurrency is a distinguishing trait, and possibly its most attractive charm; it is not issued by any central authority, making it potentially impervious to government meddling or manipulation. Lines of computer code that are used to create cryptocurrencies are digitally signed each time they are traded. Owners can hold or trade their cryptocurrencies as they please, confident in the knowledge that what they’re keeping is what they think it is because the blockchain tells them so.
Since cryptocurrencies are decentralised, they are not under the jurisdiction of any one government or financial institution. On decentralised exchanges, cryptocurrency is frequently exchanged, and it can also be used to purchase goods and services. It is challenging to use bitcoins because of their decentralised nature for governments to regulate, which has led some people to see them as a potential solution for avoiding censorship and controlling currency supply. Many countries have taken steps toward regulating cryptocurrencies, with some even banning them altogether.
The recent crypto boom has led many to question whether cryptocurrency is a bubble. While there is no easy answer, some have suggested that what makes it different from other bubbles is that people are not speculating on the future value and use of cryptocurrencies but instead want to be in on what they see as a new technology trend. Others say it is too early for anyone to know if this will be an economic revolution or another fad.
Bitcoin has been in use since its launch in 2009 on a rollercoaster ride. After hitting a peak of nearly $20,000 in December 2017, the price of Bitcoin crashed to around $3,000 just a year later. However, it has since rebounded and is currently trading at about $11,000.
No one can say whether or not we’re at the end of the crypto boom. There are still so many projects in the pipeline, but this doesn’t mean that some won’t fail and others won’t do well – there’s no way to predict which will be a success. We might be nearing a peak now, and things could slow down before they grow again, but we know that cryptocurrency will continue to change the world of finance as it becomes more mainstream and established as a means of transaction.
Digital currency is still in its infancy, but it has the potential to revolutionize the way we interact with the global economy. Here are five ways digital currency could change the world of finance and commerce as we know it.