Though not yet stable, Cryptocurrency is slowly and steadily gaining its ground. The rise in the digital market has led to the greater interest of the public in knowing and investing in cryptocurrency. But the major question that still revolves around is whether Cryptocurrency will be able to hold its ground or not. There are some other speculations regarding its future which we will briefly discuss.

What are Cryptocurrencies

Cryptocurrencies are digital currencies that are managed with the help of a high-level encryption technique which is widely known as Cryptography. Cryptocurrency came into existence with the launch of Bitcoin in 2009. Bitcoin attracted the attention of investors worldwide and soon it touched a peak of $266 per Bitcoin within just four years of its inception. It grew to have a market value of over $2billion. However, later on, it sunk 50% soon. This gave rise to a fierce debate about the future of cryptocurrencies. Will they be able to replace the existing currency such as the dollar or euro? Or will they be wiped out of the market completely? This is a matter of study.

The Future of Cryptocurrencies

Many predict that the upcoming years are going to be very beneficial for cryptocurrency as it is expected that the institutional money will enter the market. This will mean that huge investments will flow towards the cryptocurrency segment and this will really take this trade to new heights. It is also being expected that the crypto is going to be floated on NASDAQ. This will help greatly to increase the reliability of the blockchain and will lead to more investments.

What is Bitcoin

Bitcoin, as mentioned above, was the first cryptocurrency that was launched in 2009. It should be well recognised that Bitcoin is a decentralized currency. This implies that it is completely free from intervention and manipulation by the government. However, the drawback of lack of government hold is that there is no governmental body to regulate the trade. As a result, there seems a lack of high security in the trade of Bitcoins.

There is more to Cryptocurrency than Bitcoin

Though Bitcoin dominates the crypto market, yet there are numerous other cryptocurrencies in the market other than Bitcoin. Etherium, Tether, Cardano, MODEL3, XRP are a few of the top-ranging cryptocurrencies in terms of market capitalization. There are a total of 8,423 cryptocurrencies at present in the world, the total market cap of which is $1.39 trillion. Bitcoin leads the way by having a market cap of $0.84 trillion out of the total market cap.

As of today, the price of 1 bitcoin is ₹ 35, 55,935.14. A digital currency that started off with an initial price of ₹ 9,210 is now shooting high. This in itself shows the increase in the demand for cryptocurrencies in the market. Huge companies including TESLA and MasterCard is all set to accept cryptocurrencies as a mode of payment. This has led to a further rise in demand.

Risks and Dangers

One should always be aware of the fact that Cryptocurrencies are “unregulated”. This means that unlike the share market, where the trading is regulated by various regulatory and governing bodies, the digital currency market is still unregulated. Following are the risks associated as a result:

·        Nobody knows who is the seller or the buyer as Cryptocurrencies do not maintain your records.

·        You cannot reverse a transaction made through cryptocurrencies.

·        You cannot file a complaint as there is no regulatory body.

·        Terror funding and Money laundering is one of the major risks associated with digital currency.

·        Hacking is one of the primary concerns. Moreover, past ransomware attackers have demanded money in cryptocurrency so that they can’t be identified or traced.

Cryptocurrency is one of those disruptive technologies that have the potential to change the entire currency framework of the world. However, much needs to be done to replace it with or even bring it at par with the conventional currency, the first and the foremost of which is to bring it under regulation.