Free 650 words essay on Future of Cryptocurrency for school and college students.
The digital currency which uses advanced encryption techniques has made a quantum leap in its value and market share. Cryptocurrencies use a decentralized peer-to-peer technology and the ledger is free from government interference or manipulation. These are generated digitally through a mining process that requires gigantically powerful computers to solve complex algorithms and crunch numbers. There is a fundamental difference between cryptocurrency and fiat currency as the latter is backed by the full faith and credit of the government. Cryptocurrency, on the other hand, pertains to transactional autonomy and anonymity. This raises pertinent questions over illicit use and malfeasance. The blazing rise of Bitcoins has been attributed to just another bubble by some, and called revolutionary by others. There are deep speculations over its future. Some major cryptocurrencies in vogue and functionality are Bitcoin, Ethereum, Litecoin, Zcash, Ripple, Monero, etc.
The frenzy over the cryptocurrency Bitcoin is real. When started in 2010, the price of bitcoin was less than a cent, and now it has skyrocketed to $16,000. The craze has spread to hedge fund managers, Wall Street titans, and investor moguls. The other cryptocurrency Litecoin has rallied over 8000%. It is presently trading at somewhere around $261. This frenetic growth is a consequence of wider adoption and festive speculations.
Cryptocurrencies are almost impossible to counterfeit given its complicated code and decentralized system. Taking Bitcoins as an example of the demonstration of its utility and flexibility, it can be sent and received through the Internet. These Bitcoins are saved in digital wallets and transactions are verified by a decentralized network of computer users from across the globe. Bitcoins are traded across the Internet on an honor-based system. Its value is determined by the number of bitcoins in circulation.
Initial Coin Offerings (ICO) has raised $4 billion from investors so far. ICO is an unregulated way to raise funds for a startup or project through the sale of a new type of cryptocurrency, usually using a blockchain technology. Similar to other methods such as crowdfunding or Initial Public Offerings (IPO), the statistics describing the depth and strength of ICOs are beguiling. The Ethereum based prediction market application Gnosis made the fastest crowdsale of $12 million in 10 minutes. High-profile celebrities such as Floyd Mayweather and Paris Hilton have already jumped the cryptocurrency craze bandwagon. Furthermore, there are no signs of investment slowing down for cryptocurrencies.
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Some future trends suggest that blockchain technology that is behind the functioning of cryptocurrencies will become more diverse adopting new methods of privacy, security, and identity. Almost 108 countries are experimenting with issuing digital currencies and are in favor of eliminating paper currency. Bitcoins will see fewer buyers and more sellers. Governments will jump in regulate and assure the security of the new buzz. Larger companies like Amazon and eBay will start accepting Bitcoin or cryptocurrency payments. Governments and businesses will start utilizing blockchain. Blockchain and Internet of Things cybersecurity will emerge with greater vigor given the threat of ransomware attacks demanding cryptocurrencies. There will be a revolutionary drive in the digital transformation of fields that include automation, digitization of processes, tokenization of physical assets and activities and codification of complex contracts.
There have been instances of serious fraud eliciting serious response and reprimand from regulators. The People’s Bank of China has banned ICO funding in September 2017 calling it illegal and disruptive to economic and financial stability. US Securities and Exchange Commission still remain unclear and the US market regulators have issued a caution. JP Morgan’s Jamie Dimon calls Bitcoins as a fraud. The “Wolf of Wall Street” Jordan Belfort has called the whole game as the biggest scam. While others are excited about the prospects, transparency, ease, and outreach of cryptocurrency showdown. There are mixed emotions of fear, ignorance, caution, excitement, and hope about the future of cryptocurrencies. Skeptics have now turned into investors and the market is in flux. Now people can buy coins directly from exchanges like Coinbase. Blockchain technology is anyway, hailed as a breakthrough. Cryptocurrencies are regularly crossing the waves of scrutiny and legitimacy and in most likelihood gain wider acceptance and adoption.