What is the Future of Cryptocurrency?

Bitcoin and other cryptocurrencies have been the talk of the town over the last few years, with some believing that it will be to the bank what email was to postal services.

Those who firmly believe that cryptocurrency is the future are busy vilifying those that will not give it the time of day while those who believe it to be passing wind are waiting for the market to crash.

Will cryptocurrency replace money in the future? There is no way of telling but here are some thoughts

Legal Tender

The aim of cryptocurrency is not to remain highly volatile but to show stability in a way that makes it an acceptable form of exchange that will be a decentralized alternative to money.

Bitcoin and Litecoin are already acceptable forms of exchange as they are accepted in few establishments. You could even use it to pay property insurance for rental property if your provider has the provision. They also store value, although they are volatile and could lose value without much provocation.

While Bitcoin et al act as legal tender at the moment, their volatility could be their undoing. That and the fact that most people prefer to think in one unit of account. No buyer or seller wants to hold a currency that they are afraid could lose value as soon as they receive it.

Decentralization and Secrecy

Currently, the biggest strength of cryptocurrency is its ability to take banks out of the picture and introduce a totally decentralized system. Blockchain, a public ledger, records each transaction so that every coin is traced – its origin and where it is headed – to ensure openness and accountability.

What is not taken into account is the fact that this digital currency can be used to fund drug sales, criminal activity, and more immoral acts since no central factor is keeping it in check.

What of money laundry and tax evasion? These two factors make it quite hard for this technology to replace the monetary system as we know it.

Experts and Leaders have their Say

Mark Cuban, a billionaire with money to spare, has invested in Bitcoin and Ethereum, but only advises investors to get on board if they have money they can afford to lose. He notes that Bitcoin’s value could be $15,000 today and zero tomorrow.

Bill Gates and Theresa May look at the criminal activities likely to be financed using digital cash. Gates was quoted saying, “The main feature of cryptocurrencies is their anonymity. I don’t think this is a good thing.” This anonymity, he says, has led to the funding of fentanyl and other drugs, making this singular technology to be quite destructive.

Bank for International Settlements does not have a good word either. It is concerned about the environmental disaster that mining of the currency leads to, and also notes that the currency could lose value at any time.

The CFA Institute is one of the few organizations that have shown faith in cryptocurrency by introducing it to its currency to equip future graduates. Jack Ma is of the opinion that the technology could change the world, but it “could be (also) a bubble.”