The evolution of currency
In the past, people traded goods and services directly through a system of bartering. Over time, for quicker and standardized transactions, currencies began to make. The primary use of an industrial facility to manufacture coins that would be used as money was thought so far back to 600 B.C. when the elites of Lydia (modern-day Western Turkey) used stamped silver and gold coins to pay armies. Moving forward through the centuries, we’ve come to believe in fiat currencies (coins, banknotes, and credit cards) to get goods and services. The 21st century has graced us with one more currency — the virtual currency also referred to as cryptocurrency. In 2009 Bitcoin was the first cryptocurrency to hit the market, invented by Satoshi Nakamoto, in response to the 2008 financial collapse.
What is the Future of Crypto Currencies?
Supporters of Bitcoin and other cryptocurrencies claim that these financial platforms are inherently trustless systems – that they’re indirectly tied to any nation-state, government, or body. They might argue that cryptocurrency is superior to traditional physical currencies because it’s not hooked into, as an example, the U.S. federal.
Grundfest notes that no matter whether you think that that’s a natural or lousy thing, it’s not entirely accurate. Cryptocurrencies aren’t trustless in the least. They’re still reliant on the underlying infrastructure powering cryptocurrencies like Bitcoin, much of which is found in China. The Chinese government could theoretically make changes to cryptocurrencies at a fundamental level by imposing its will on the data miners who keep them running.
Today, there are over 4,000 sorts of cryptocurrencies circulating the worldwide digital infrastructure. These virtual currencies are often used to buy goods and services, using a web ledger with solid cryptography to secure online transactions built on top of blockchain technology.
Professor Grundfest Approach
Stable coins have grown in popularity as a way to back a cryptocurrency with assets that hold real value, much like U.S. currency wont to get on the gold standard. Those assets might be other currencies or commodities — virtually anything.
There are a few issues Grundfest has with this approach. For one, it essentially recreates a system that already exists. The opposite concern is that it could make it easier for people to commit fraud since it’s not as easy to audit and monitor as traditional currencies.
Professor Grundfest closed the webinar covering a number of the more robust applications for cryptocurrency. For example, people living in countries with weak currencies could also be happier investing in Bitcoin than buying local stocks and bonds.
Cryptocurrency’s future outlook remains considerably in question. Proponents see limitless potential, while critics see nothing but risk. Professor Grundfest remains a skeptic, but he concedes that there are specific applications where cryptocurrency may be a viable solution.
Outlook Cryptocurrency
Even as the world’s largest and hottest cryptocurrency is making headway, the question of regulation looms large in India. At present, the meteoric rise of Bitcoins is often attributed to continued interest by significant corporations. Now, more and more small and large investors worldwide are interested in cryptocurrency due to its potential gains.
Recently, the worth of Bitcoin crossed the record high of $54,000. The historic feat was achieved after a number one electric carmaker announced that it bought $1.5 billion in Bitcoin and would accept the currency because of the mode of payment. The steep rise in the value of the virtual currency has made it a hot topic among analysts and investors everywhere on the planet.
While investors are riding the waves of this global phenomenon, India continues to be in a dilemma. There are rumors of the government getting to ban all private virtual currencies and launching its official digital currency. These developments are raising many pertinent questions. However, legal experts and investors unanimously agree that banning isn’t the answer.
A Highly Volatile Market
When it was first introduced, Bitcoin was worth $1. It’s now worth over $50,000 (£36,000). The surge in price is right down to simple supply and demand since only 21 million Bitcoins will be mined. As of 24 February 2021, 18.638 million Bitcoin are mined, which leaves 2.362 million yet to be introduced into circulation. Adding to the fluctuations in the cryptocurrency market are decisions like those taken by the SEC and FCA, which, perhaps unintentionally, provoke more uncertainty within the overall crypto market. Leading to traders making choices supported emotion, thus resulting in increased market volatility and quick volatility liquidity.
What Will Come Of All This?
The interest in crypto was sparked following the 2008 financial crisis because people lost faith in the existing economic infrastructure. Significant events like WWI, WWII, and the 2008 financial crisis caused devastating and long-lasting effects on the worldwide economy. Livelihoods and the economy have taken yet one more blow following the present COVID-19 pandemic during the midst of recovery. To save lots of us from financial burden, central banks are printing more and extra money. Still, we must ask ourselves what proportion longer this process of quantitative easing is often sustained. Through this process, our traditional currencies are getting worthless. Today, our money has value because our government tells us so, but since the Nixon Shock within the 1970s, the U.S. dollar (the world’s reserve currency) isn’t backed by gold or anything of intrinsic value. With a rise in the cost of living and a bleak outlook on the recovery of our economy, it’s no wonder that we are trying to find a shark repellent.
Based on the above, and therefore the current rate of technological advancement, businesses and individuals alike are adapting. Just consider fintech firms, which have already begun to access new technologies that believe blockchain, to remain before the competition.
