A lot of being see cryptocurrencies just as another stock which you can trade with to earn money. But it might just be the currency of the future.
What Are Cryptocurrencies
Before we discuss if we will use cryptocurrencies in the future, we need to find out what they are. Well, officially a cryptocurrency is a digital medium of exchange based on strong cryptography. This means that cryptocurrencies use cryptography to secure transactions and control the creation of additional units.
The reason why cryptocurrencies were created is that a lot of people wanted an online currency that is not controlled by a government. The person that invented the first cryptocurrency, Bitcoin, is called Satoshi Nakamoto.
To us consumers, cryptocurrencies look just like normal online banking services like PayPal. But behind the scenes, they are completely different. While ordinary banking works with actual numbers crypto uses encrypted codes that move from peer to peer. The people can exchange these for other currencies or goods.
A lot of illegal money transfers that are done online will use crypto as it is very difficult, almost impossible, to track where the money comes from. Miners create new cryptocurrencies by solving puzzles. These miners use computers to solve these difficult puzzles to get hashes, which equals to crypto. The reason why most cryptocurrencies are staying stable is because we can only create a limited amount of hashes at a specific time
So, to summarise, cryptocurrencies are online currencies that are not controlled by a government and are secured by cryptography.
When Will We Use Cryptocurrencies
We will not answer this question with a date. Instead, we will look at what will need to happen before we will use crypto. Generally speaking there won’t be a concrete day that we will switch over to crypto but rather more and more people using it over ordinary cash. Kind of like when we switched from cash to using credit and debit cards.
Once people decide that they want a more secure and easy way to transfer money they will switch over to crypto. It is much faster to transfer money using cryptography as it is almost instant. Nowadays banks take ages to transfer money and people don’t like that. We think this will happen within the next 5-10 years or after a huge economic crisis.
During the economic crisis, ordinary currencies will lose their value massively but cryptocurrencies will probably not. This will lead to people exchanging their currencies into cryptocurrencies. After every economic crisis, the market will eventually recover but people will continue to use crypto instead of ordinary currencies and governments will have to follow.
We don’t think that ordinary currencies will be obsolete, but rather be used as a side currency. Kind of like we use online cash more than cash.
How Will We Use Cryptocurrencies
Continuing with the theme of cryptocurrencies in the future, let’s look at how we will use them in the future. Like we briefly mentioned earlier, we think it will start off just as another currency. Then more and more services, governments and businesses will adopt this new currency. Once that has happened all of the currencies we know now will become obsolete.
Ideally, we would use cryptocurrencies just as we use currencies now. Exchange an amount of crypto for a certain service or product. Just that we will be able to do everything with our phone or even face/fingerprint. Buying stuff online will act just like PayPal. You can purchase thing with your crypto account and the money will be transfe
Anything huge amounts of money that need to be transferred will use crypto much earlier. There is currently no safer way to transfer money. This will probably be the case for a long time. This is thanks to the earlier mentioned cryptographic encryption that it uses.
Currently, a lot of people trade with cryptocurrencies just like stocks. We think this will continue to happen because the price of each crypto can fluctuate compared to others. The only change that will probably happen is the prices will fluctuate less the more we use cryptocurrency. This is because the more we use it the more stab
Benefits Of Cryptocurrency
Now that we have talked about what cryptocurrencies are and when & how we will use them, we can look at the benefits. Why should we use crypto instead of what we have now? Well, there are a lot of benefits crypto has compared to current currencies.
The major advantage crypto has is that it is not controlled by a government. This means no matter what economic trouble a country has, your money won’t lose its value. This has been a problem since the implementation of currencies around the world.
Next up is safety. Crypto is much safer in all aspects, from transactions to identity theft. Because everything is encrypted no one can access your account or track your transactions. Unlike other online money services like PayPal, you are the only one who can control your crypto account. This prevents companies from freezing your account without your consent.
Lastly, everything works much faster because everything is based on the internet. Money transfers can happen instantly because the money doesn’t have to move from one bank to the other. This can be really useful for major corporations.
Downsides Of Cryptocurrency
Last but not least we need to tell you about the downsides that crypto has. Although there are some downsides we still think the benefits can justify them. But that is something everyone has to decide for themselves.
The first downside is related to one of the benefits. Because cryptocurrencies are so safe and hard to track, they can become very popular throughout the criminal world. It is almost impossible to trace a transaktion.
Understanding how cryptocurrencies can be pretty difficult. We have never had anything similar. This can lead to a lot of confusion and distrust. If people don’t trust crypto it will never grow.
Well, that was our take on the future of cryptocurrencies. Do you believe in the crypto market or do you want things to stay how they are now?