Cryptocurrency Future - What would that actually look like?A cryptocurrency or digital currency is essentially virtual funding managed by sophisticated encryption methods, collectively known as cryptography. It first manifested back in 2009 in the form of bitcoin and subsequently, there have been hundreds more that have followed. While the number of users of Bitcoin has been growing rapidly since its inception, it really became a subject of immense media scrutiny in April of 2013 when it reached a record peak of $266 per coin which was a 10-fold expansion from a previous couple of months. At its peak, Bitcoin retained a market value of up to $2 billion but subsequently sustained a 50% plunge which was more or less the spark to an intense and ongoing debate regarding the idea of a cryptocurrency future in general. Will we one day make the leap from the use of tangible fiscal currencies to virtual currencies that will be traded entirely over the internet? If so, what should we expect? The key factor to look at here is Bitcoin.
The Current BenchmarkBitcoin sets the standard by which all other cryptocurrencies are measured. In fact, most other prominent cryptocurrencies promote themselves, citing those attributes they have which are not available on the Bitcoin network. Bitcoin is a kind of decentralized cryptocurrency using peer-to-peer technology and enabling all of its functions to be executed by the network itself. Said functions include issuing of currency, processing and verifying transactions. With no interference from any government authority, the digital production of Bitcoin is the result of a so-called ‘mining’ process dependent on powerful computers that can solve complicated algorithms. All of this just goes to show that Bitcoin differs from any fiat currency even on an elementary level. All fiat currencies have a centralized authority to supervise it, such as the central bank.
Heightening Media ScrutinyThe main attributes of Bitcoin, decentralization, and anonymity for transactions, have backfired as they have made it a famed choice for various illegal operations such as money laundering, smuggling, drug peddling, and the provision of assault weapons. This has obviously aroused the attention of government agencies like the FinCEN, FBI, SEC, and DHS.
Alternative CryptocurrenciesWith Bitcoin’s success as the first ever cryptocurrency, others have swiftly followed after it, albeit with the intention of toppling it altogether as the most prominent cryptocurrency in existence. Here is a list of a few of those well-known alternative cryptocurrencies.
- Ethereum (ETC)
- Litecoin (LTC)
- Ripple (XRP)
- Monero (XMR)