By Priyal Babaria
Well some argue it already has. Some argue that it will not come for another decade or more. But one thing that everyone seems to agree on is that revolutionized currency and technology, in a way that might have been impossible a few years back. So what is the hype really all about? One thing that traders, high schoolers and businessmen have in common: the desire for privacy.
It follows a block chain method, which is clearly one of the biggest advantages and disadvantages. Before we can even discuss the pros and cons, understanding the main idea behind the block chain method is important. It is largely a “distributed ledger enforced by a disparate network of computers.” This also brings up the topic of cryptocurrency, which is exactly the “new dollar” according to most of the youth. The whole craze behind the same is the idea of something that would work like money but it would be non-traceable, fast, efficient, and in all still be able to operate between networks.
One of the main reasons why cryptocurrency actually soared is based on the simple fact that no one can trust each other online. After all, how much can we trust someone who is behind a screen with all our data, and in many cases money? Even reputed companies seem to falter on the correct management of data. This created a whole need for a system where trust was no longer a variable. This gave a whole new perspective on transactions that could be possible. As no one is a trusted user, and everyone has a ledger of all the transactions that is updated regularly, trust is finally no longer a variable.
Bitcoin, one of the most famous cryptocurrencies, can be seen as blockchain’s successful trial run. And it came at the perfect time in 2009, where no matter how bad things were, it could always get worse. Due to circumstance and possible desperation for a new form of currency lead to the initial success of Bitcoin. And nor did the press or the people leave a chance to grab onto it. Rising mainstream interest, geopolitical tensions, expansionary monetary policy, a supply cut, and bitcoin whales may be responsible for the surge of Bitcoin’s success. Now some of the most notable and reliable ones include Ethereum (ETH),Ripple (XRP),Litecoin (LTC) , and Tether (USDT).
But like every invention, it has its own set of problems. One of them being the idea of crime involving itself in cryptocurrency due to the vast privacy levels the transactions have. The Silk Road was one of the most infamous dark web marketplace for illegal drugs. It was worth $1.2 billion dollars, and within a secured transaction one could have heroin and other drugs on their doorstep. There have been cases of non-state groups, whose revenue has been increasing, largely attributed to anonymous funding from different parts of the world.
While the security and health is compromised by the currency, even its own stability as a currency is a question. All cryptocurrencies are known to have some, if not high, levels of volatility. The bitcoin price failed to breach the $10,000 per bitcoin level. While just following a week of its launch Compound’s comp token has surged around 250%, giving it a market value of around $2 billion, according to some calculations.
Due to governmental influences and the following disadvantages, it is unlikely to ever see any cryptocurrency legally acquiring the stance as an official currency. However the very idea of having a decentralized and dependent currency is one that will grip pop culture and old economists till its very demise.
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