What is Cryptocurrency?
Cryptocurrency is a virtual currency that is protected by the use of cryptography and thereby is impossible to counterfeit or double-spend. These are not issued by governments or any other central authority and are immune to any interference or regulatory attempts.
Uses and Importance of Cryptocurrency
Cryptocurrency is used as a form of payment in the exchange of goods and services on the internet. The concept is similar to the special coupons issued by the companies only this is on a virtual platform using the blockchain concept and is decentralized. The use of cryptocurrency is observed the most in trading activities where supply and demand make the price of cryptocurrency fluctuate drastically.
Popularity of Cryptocurrency
Currently, there exist many types of cryptocurrency, the top 5 being Bitcoin, Ethereum, Cardanol, Tether, and Binance Coin. The rise of cryptocurrency is attributed mostly to the fact that people seem to think that this will replace common currency in the future and the absence of any central authority like governments or banks in the transaction is very appealing to many. However, despite the sky-high prices of cryptocurrency, the extremely fluctuating nature of the virtual currency has made it unpopular with traders as they view these as mere fluctuations. The question of whether it can replace currency is undecided yet it can be said fairly certainly that unless there is some uniform basis attributed to cryptocurrency to enable traders to compare, it cannot become the substitute.
Trends in Cryptocurrency
The major trends expected to occur in cryptocurrency are as follows:
- There is talk of cryptocurrency regulation in the near future with the idea that such regulations will be implemented as traders do not like the extremely volatile nature of the currency. This will also result in a significant reduction in the misuse of cryptocurrency. For instance, in the UK itself, though cryptocurrency is not considered to be money its trade requires registration and is taxed.
- There will be attempts made by the crypto market to reduce the hazards of crypto mining and ensure the security of users.
- With the prediction of cryptocurrency becoming more popular in 2022, crypto brokers are sure to make any changes to attract a large number of traders and increase the features of the currency.
- The number of universities and Business schools accepting payment in terms of cryptocurrency is expected to increase. Their willingness to accept cryptocurrency was observed at the very launch of 2009, however, to date very few institutions have done it. The number is expected to increase by 2022.
- Ethereum is currently competing with bitcoin as the top cryptocurrency and experts speculate that by 2022, Ethereum will be the leading cryptocurrency.
- Investors who take volatility seriously will opt for stable coins like tether and thus from this, we can conclude that there will indeed be an upsurge of stablecoins in 2022. In the case of the UK, its split with the EU will cause its cryptocurrency to diverge from the rest of the EU and so stabilization may be necessary to some extent.
- The Bitcoin traders and investors may soon have an Exchange Trade Fund or ETF whereby they can buy and sell cryptocurrency. This implies that there will be many more platforms facilitating the trading of cryptocurrency soon.
- In 2021, major commercial brands like Amazon took up the use of cryptocurrency. Already, many tech companies are giving out employee salaries as bitcoin. So, there will be a definite increase in bitcoin in 2022.
Like most other relevant transitions in the current world, cryptocurrency also has its pros and cons. So, if cryptocurrency becomes the norm and replaces normal currency shortly, what happens then?
The pros of such a situation are that any value stored in the form of cryptocurrency will be safe as the blockchain technology of cryptocurrency has never been hacked and the technology of blockchain interlinked with decentralization can be implemented across various fields and thus assist in people’s daily lives. Also, cryptocurrency in itself will be decentralized and as a result, will not be prone to inflation or be controlled in any way.
The cons of cryptocurrency would be the anonymity of the user and though it may be good for individualism, it might hamper the safety of other people on the internet. Also, as this is virtual money, the risk of losing it due to a hardware failure is very great and currently a problem. There has not been much stabilization done in cryptocurrency and as a result, the governments are thinking of placing rules and regulations on them. This particular measure has raised concerns among the users of cryptocurrency as they fear that the main point of cryptocurrency decentralization may be lost.
Are these trends a positive change?
The one question that one may ask is whether the change from currency to cryptocurrency as can be observed currently a positive change. The answer is not very simple. On the one hand, cryptocurrency promotes deregulation and decentralization which can help reduce the ability of people in power to control finances and thereby offer a good deal of independence to the users. The anonymity of the cryptocurrency is both a blessing and a curse as while it can lead to better safety of the users, it can also facilitate untraceable illegal activities on the internet. Also, though cryptocurrency is safe from hackers, any hardware malfunction may cause the loss of the currency or wallet and so the software must be better improved.
Like any progress made in the last few decades, the shift from currency to cryptocurrency is also one such progressive change in terms of technology. The future often does not unfold as is hoped and the trends of cryptocurrency in 2022 are nothing but speculation based on current trends, however, it would be safe to say that even if cryptocurrency is not permanent, it will leave a mark on the financial history of the world. If you are searching for proper trading platforms, check out quantum ai and bitcoincodefinland.com
- Blogger by Passion | Contributor to many Business Blogs in the United Kingdom | Fascinated to Write Blogs in Business & Startup Niches
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