Cryptocurrency

Cryptocurrency in 2022: The Fintech Disruptor

Blockchains, sidechains، mining the terminologies in the underground world of cryptocurrency keep piling up by the minute. Although it sounds counterintuitive to introduce new financial terms in an already complicated world of finance، cryptocurrencies offer a much-needed solution to one of the biggest annoyances in today’s money market the security of transactions in a digital world.

Cryptocurrency is a defining and disruptive innovation in the fast-paced world of Finnish technology، a relevant response to the need for a secure medium of exchange in the days of virtual transaction. At a time when deals are just numbers and figures, cryptocurrency proposes to do just that!

In the most rudimentary form of the term، cryptocurrency is a proof of concept for alternative virtual currency that promises secure, anonymous transactions over peer-to-peer online networks.

The misnomer is more of an asset than actual currency. Unlike everyday money، cryptocurrency models operate without a central authority، as a decentralized digital mechanism. In a decentralized cryptocurrency mechanism، money is issued, managed and approved by the collective network of the community whose ongoing activity is known as mining in a peer’s car.

Successful miners also receive coins to value their time and resources used. Once used, the transaction information is transmitted to a blockchain on the network under a public key، preventing any coin from being spent twice by the same user.

Blockchain can be considered as the cashier’s ledger. Coins are secured behind a password protected digital wallet representing the user.

The supply of coins in the digital currency world is predetermined, without manipulation, by any individual, organization, government entity، and financial institution. The cryptocurrency system is known for its speed، as transaction activities on digital wallets can materialize funds in minutes, compared to the traditional banking system.

It is also largely irreversible by design, further strengthening the idea of ​​anonymity and eliminating any further possibility of tracing the money back to its original owner. Unfortunately, the salient features – speed, security and anonymity – have also made cryptocurrencies the mode of transaction for many illegal trades.

Just like the money market in the real world, currency rates fluctuate in the digital currency ecosystem. Due to the limited supply of coins, as the demand for the currency increases، the coins inflate in value. Bitcoin is the largest and most successful cryptocurrency to date, with a market cap of $16.3 billion, accounting for 38.6% of the market and currently priced at $8,988.32. Bitcoin hit the currency market in December 2017 trading at $19,783.22 per coin, before facing a sudden decline in 2018. The decline is partly due to the rise of alternative digital currencies such as Ethereum، NPCcoin، Ripple، EOS، Litecoin and MintChip.

Because of the limits encoded in their supply، cryptocurrencies are considered to follow the same economic principles as gold the price is determined by limited supply and fluctuations in demand. With exchange rates constantly fluctuating, their sustainability remains to be seen. Consequently, investing in virtual currencies is more of a speculation at the moment than a day to day money market.

In the wake of the industrial revolution، this digital currency is an indispensable part of technological disruption. From the point of view of a casual observer, this growth can seem exciting، threatening and mysterious all at once. While some economists remain skeptical، others see it as a lightning revolution of the money industry.

Conservatively, digital currencies will displace roughly a quarter of national currencies in developed countries by 2030. This has already created a new asset class alongside the traditional global economy, and a new set of investment vehicles will come from cryptofinance in upcoming years. Recently، Bitcoin may have taken a dip to put other cryptocurrencies in the spotlight.

But this does not signal any crash of the cryptocurrency itself. While some financial advisers emphasize the role of governments in cracking down on the underworld to regulate the mechanism of central government، others insist on continuing the current free flow.

The more popular cryptocurrencies are، the more scrutiny and regulation they attrac a common paradox that destroys the digital grade and erodes the very purpose of its existence. Either way, the lack of intermediaries and oversight is making it extremely attractive to investors and causing day trading to change drastically.

Even the International Monetary Fund “IMF” fears that cryptocurrencies will displace central banks and international banks in the near future. After 2030, regular trade will be dominated by the crypto supply chain, which will offer less friction and more economic value between tech-savvy buyers and sellers.

If cryptocurrency aspires to become an essential part of the existing financial system, it will have to meet very different financial, regulatory and societal criteria. It will need to be hacker-proof, consumer-friendly and highly secure to provide its fundamental benefit to the mainstream monetary system.

It should preserve the anonymity of users without being a conduit for money laundering, tax evasion and online fraud.

Since these are indispensable to the digital system، it will take a few more years to understand whether cryptocurrency will be able to compete with the real world currency in full swing. While it is likely to happen, the cryptocurrency’s success (or lack thereof) in meeting the challenges will determine the fate of the monetary system in the coming days.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button