Since the development of Bitcoin and the public introduction of blockchain technology, the crypto industry has gone a long way. Only a few financial aficionados were interested in crypto in the beginning. The world’s major banks and IT companies now publicly recognize crypto technology and invest hundreds of millions of dollars in it. The blockchain’s introduction makes massive advances ahead. Even with such extraordinary accomplishments, predicting the future of the crypto sector is quite challenging. We’ll try to see where Bitcoin is headed in this post.
Before we get into the meat of the matter, it’s crucial to take a broad look at cryptocurrency in general and assess its current state.
It’s no surprise that this marriage of money and technology has influenced financial institutions: since the financial crisis of 2007-2008, customers of traditional financial services have been clamoring for new technology, security, and flexibility.
This need has resulted in a slew of fintech companies expanding the blockchain and cryptocurrency ecosystem. We now have more secure crypto wallets to store digital assets and controlled and decentralized exchanges like Binance and Uniswap, public chain infrastructure, crypto payment systems, and so on. Furthermore, the recent growth in investors in the crypto field has made trading and long-term investing in cryptocurrencies an activity with a great potential for big rewards. GET STARTED NOW! and see the potential for yourself.
Is Traditional Currency on Its Way Out?
The idea of cryptocurrencies is given a lot of attention in the Deutsche Bank research on the future of finance in the next decade. They point out that this business has historically been viewed as an addition to the global money supply rather than a replacement, but that might alter depending on the future of cash – and cards.
“Cryptocurrencies have always been additions to the global inventory of money, not alternatives,” according to the research. “Despite their well-known virtues, including as security, speed, minimum transaction costs, simplicity of storage, and relevancy in the digital world, they have failed to take off as a form of payment.”
“Cryptocurrencies must overcome three major roadblocks in order to gain mainstream adoption. They must first establish themselves as legitimate in the eyes of governments and regulators. This entails maintaining pricing stability and providing benefits to both businesses and customers. They must also enable worldwide payment market access. To accomplish so, partnerships with major stakeholders are required, including mobile apps like Apple Pay and Google Pay, card companies like Visa and Mastercard, and shops like Amazon and Walmart.”
Of course, some of this is already being planned, with Walmart, for example, showing interest in blockchain technology. This is for its supply chains and has nothing to do with Bitcoin, but it is a stepping stone for the next ten years.
However, it is not as simple as overcoming those three obstacles; according to the bank, additional issues will surface as bitcoin becomes more widespread and cash becomes obsolete.
A Bitcoin That Is Better
Because it was produced using a modified version of Bitcoin’s source code, Charlie Lee, the currency’s developer and founder of the Litecoin Foundation, described the coin as a “light version of Bitcoin.” While the two have a similar history, there are significant key distinctions, including the hashing function, block production pace, and supply availability.
According to Lee, the Litecoin network generates new blocks every 2.5 minutes on average, which is four times quicker than the Bitcoin network, which mines blocks every 10 minutes.
The benefits of cryptocurrencies have just begun to draw institutions. Traditional finance is scrambling to meet the rising demand, such as the U.S. Bank’s recent launch of a bitcoin custody service that allows hedge funds to invest in the digital currency.
While increased institutional investment implies more potential for average investors, it also challenges the capacity of digital currencies to operate outside of traditional finance. The contradiction begins here.
Over the last few years, the infusion of institutional capital into cryptocurrencies has begun to shift the market’s power structure. Thirteen years ago, cryptocurrency users were attracted by a desire to shake up the elitist, institutionalized banking world to provide a universally accessible means to move money and pay for products and services, independent of personal circumstances.
To deal in crypto, unlike traditional banks, you didn’t even need an address; all you needed was an internet connection. In theory, cryptocurrency depends on the collective activities of ordinary users to self-regulate; they protect and update the transaction log – the blockchain – and the process allows anybody with a computer to mine coins.
Fast forward to 2021, and cryptocurrency’s future looks very different. Bitcoin miners are no longer the only ones benefiting from its success, nor are they the only ones mining it. Over time, the mining network has been encircled by a few businesses that can offer the massive quantities of processing power and electricity necessary to mine at scale, making it extremely difficult for individual users to participate.
At the same time, the discovery that big corporate expenditures, such as one by Tesla, which caused the price of bitcoin to soar 20% in a single day, put even more doubt on the market’s democratic nature.
The Uncertain Future
Cryptocurrency has always been volatile, both in terms of price and in terms of public perception. Despite its meteoric rise in recent years, the future of cryptocurrency remains unknown.
This is a moment of contradictions to navigate for the typical investor, government authorities, and those working to make crypto greener. If there’s one thing we can be assured of, it’s that the market in 5 years will be as unfamiliar to us as it is now.
While authorities will determine the future of cryptocurrencies, businesses, many of which are coming into the market to serve the requirements of the rising marketplace that governments have so far neglected, can also have an impact. This might be accomplished by enabling transactions in a more comfortable, secure atmosphere for “newbies” or by providing knowledge and resources to inquiring intenders.
Leaning into the shifting profile of investors and predicting what the more “mainstream” audience could need is a part of that future. Traditional payment providers that provide access and education will undoubtedly attract older investors, but the expanding number of businesses that take digital currencies can make the market appear safer.
