The cryptocurrency debate – Is it the future of money or speculative hype?
Cryptocurrency, especially Bitcoin, came into news and gained a high popularity after it started rising beyond everyone’s expectations and predictions. Back in 2008 – 09 when bitcoin and cryptocurrency came into existence, the world thought that it is another way of duping people and looting their money. Those who invested in bitcoin at that time, also pulled out their money, fearing that they might lose it all!
But those who did not take their money out, and bought Bitcoins as cheap as a for a dime, are millionaires and billionaires today. It all started when Bitcoin’s price started rising suddenly in mid-2017. When it touched $1000 per coin in somewhere in 2016, people said that it will crash down and that it was the end of cryptocurrency, but by the end of 2017, the price was around $14,000 – something that a lot of people did not see coming! This shocked everyone, even the expert prediction makers and market analyzers.
Economists who have always believed in and vouched for traditional (or Fiat) currency, never believed in the concept of crypto or currencies like Bitcoin. They always believed that a third-party is necessary to keep things going and that banks cannot be made outdated. Their beliefs started getting stronger when around the new year of 2018 (end of December 2017 and early January 2018), the price of Bitcoin started crashing. Not only Bitcoin but all other alt-coins including – Ethereum, Ripple, Monero, Golem, Bitcoin Cash, Ethereum Classic and other coins that had been otherwise rising like a rocket for months!
The crash is said to be caused by more than one reasons. Where some countries banned cryptocurrency trading, some cryptocurrency exchanges were hacked. All these negative news and propaganda lead to the ultimate crash of Bitcoin, and it came crashing down to $6000 from soaring high at $14,000. The crash took down many people along with it. There were many customers who had purchased Bitcoin on credit from banks, and many others also mortgaged their homes to double their money through Bitcoin! But all their dreams crashed with the crash of cryptocurrency and that is when the belief of economists got stronger.
But with all these rises and falls, one question always remained – Is it a speculative hype or is there actually money in cryptocurrency in the future?
The truth is – nobody really knows! The concept of blockchain has great scope of real-time applications for future, considering the kind of world we are building around ourselves, but how solidly cryptocurrency markets itself and how quickly people adapt to the idea of decentralized money, is what makes cryptocurrency a success or a failure.
The entire concept of any currency is to ‘exchange’ it for goods and services, while people started hoarding cryptocurrency to multiply it. Cryptocurrency is a currency and not an asset, and that is where the fundamental difference is. A lot of cryptocurrency news, still showcases hopes in favor of a bright future for Bitcoin and other alt-coins, but the real success lies with people.
What are the chances of revival of Bitcoin?
This is one of the most frequently asked question all over the internet and in many Reddit threads and forums. Bitcoin will definitely go up because the number of coins that are to be mined in the world is limited. This is something that can’t be reversed, hence the price of Bitcoin will definitely go up in future. But how quickly will it recover from the recent crashes is what nobody can predict.
The principle of demand and supply
The price of gold and diamond is so high in the world because the demand is more than supply. When you present something like a rare commodity, it is human nature that people will suddenly want to have it! Where there is more demand than supply, the price increases and that is where decentralized currency, comes into the big picture. Another big thing is that all alt-coins (if not all, then mostly), are somehow connected and linked with Bitcoin. You might have observed it that the price of alt-coins is greatly affected by the movement of Bitcoin up and down the price-chart. Hence, if in future Bitcoin is presented as a rare commodity, the price will go up, leading to other alt-coins also rising in price.
Even if that does not happen, we can always rely upon blockchain, and the scope of it in the future. We are heavily connected and dependent on technology, and most of the people can’t imagine one day without their phone or the internet. The addiction is so bad that it is only going to become worse in the future. And that is where a lot of profit-making companies step-in, as they know what an addicted human being wants – more dose of his high! That is why they are building more and more sophisticated tech, that even our present lives will seem tiresome in front of the future we might be living in.
Blockchain will be an indispensable part of most of the technological applications, and blockchain is primarily fuelled by cryptocurrency. Hence, nobody can stop its price from touching the skies in future for sure. It might take time for a 100% adaptation of cryptocurrency, replacing fiat money, but the day that happens will be the day that our world will be truly liberated from a lot of redundant policies and conditions imposed upon us by banks and financial institutions. The money we are currently ‘paying’ to the banks to provide us services, will instead be paid back to us by crypto-financial institutions, for using their services. And that is the true way in which the world must be working.
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