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.
Having said that, the good news is that governments
across the globe, including the Indian Government, are thinking of bringing digital currencies under regulation. The Cryptocurrency and Regulation of
Official Digital Currency Bill might be tabled in the Parliament soon.
Moreover, India is set to move forward hand in hand with the global
technological advancements by bringing in an official digital currency that
will be issued by the RBI. Thus, we must get ready to see transactions in
cryptocurrency quite soon.
