What Is the Future of Cryptocurrencies?

Cryptocurrencies are digital currencies that are created using cryptography on blockchain technology, these currencies are decentralized and are not controlled by any central authority or any government. Some examples of cryptocurrencies are Bitcoin, ETH, TETHER, BNB, and DOGE. The craze of crypto is increasing worldwide every single day and the returns investors get from crypto are insane but it is highly risky as well because of that investors are worried to some extent, but many big investors are bullish on crypto as they believe that future of the crypto and blockchain is positive.

So, let’s discuss some points about cryptocurrencies that will clear the picture about the future of cryptocurrencies.

The adoption of crypto in future: The first question that comes to the mind of the investor while investing in crypto is whether it is legal or illegal as there are many countries where cryptocurrency has not a fixed side which means countries have not declared trading crypto legal but also have not given illegal status, for example, India where taxes are imposed on the profits earned by crypto by they didn’t make it clear whether it is legal or illegal, but many countries like US, Canada, Germany, UK, Japan, Australia, etc have adopted Bitcoin as legal tender and many companies in these countries have started accepting Bitcoin as a payment method which is a good sign for the future of crypto.

The supply of a cryptocurrency: The physical money is unlimited in supply government can print as many notes as they want, but in the case of cryptocurrency the supply is limited at some point for example Bitcoin whose total supply is 21 million after this mark no more Bitcoins can be mined (created) which makes them rare due to which they hold value and the economic rules say that limited supply will create more demand in the market which is another positive sign for cryptocurrencies, Currently circulating supply of Bitcoin is $18.9M. Many big investors have invested huge amounts in Bitcoin considering its supply.

No. of investors: The number of investors investing in cryptocurrency is increasing every year as the good rate of interest is attracting them. Not only retail investors but also institutional investors are stepping into the Crypto industry, there are more than 300 million people investing in the cryptocurrency and the number is increasing every day which is a positive sign, the most no. of crypto investors are from India more than 100 million users and after that USA with more than 20 million users. Many famous personalities and billionaires have invested huge amounts in Bitcoin like barry Silbert who holds $25.3 billion worth of bitcoins as of April 23-2022, Michael Saylor who holds $84 million worth of Bitcoins, Elon musk who holds $1.5 billion worth of BTC, these values must have changed due to current market price.

Pros of cryptocurrencies

Protects from inflation: Inflation makes the value of the currencies down over time, but at the time of launch supply of every cryptocurrency has been fixed, like Bitcoin has a total supply of 21 million which creates demand in the market and helps in preventing inflation in the long run.

Decentralized system: One of the major benefits of cryptocurrencies is a decentralized system which means it is controlled and managed by many teams or groups rather than one single authority which brings transparency to the system.

Smooth transaction: Another benefit of cryptocurrency is that it is a Peer to peer system as it can be sent to anybody In the world eliminating 3rd parties like visas, MasterCard, etc which makes them cost-effective as users are not required to pay any additional fees while doing transactions.

Cons of Cryptocurrencies

Illegal transactions: The major reason why governments across the world are not adopting crypto is because of the illegal transactions, since the privacy and security in the cryptocurrency are very high it becomes hard for the government to keep eye on the illegal transactions happening as it is not possible to find out the user with their address, cryptocurrencies have been used for payment modes for illegal activities like buying drugs, weapons on the dark web, etc.

Loss of Data: The wallet where users store their cryptocurrency is not secured by any password but they are secured by private keys which include a bunch of words, if the user lost their private key there is no way to access the wallet it will be lost forever there have been many cases where people lost a lot of money by losing their private keys.

No refunds: Another con of Cryptocurrency is users have to be very careful while sending crypto to someone, if anyone sends crypto to any wrong address users cannot cancel the transaction or file any complaint to get a refund.

Conclusion

There are 2 sides of people, one who believes in crypto’s positive future and the other who is against it. Lately, the success of Bitcoin since 2009 has led to the emergence of many other cryptocurrencies like Eth, lite, and ripple which are backed by million-dollar companies, which indicates cryptocurrencies have a good future. But it is highly volatile, so should we invest in crypto? The answer is you have to manage risks according to the market and if you don’t want to take risks you shouldn’t go for crypto investment and look for some safe investment options.