In essence, cryptocurrency is a digital currency created and managed using cutting-edge encryption techniques called cryptography. In 2009, cryptocurrency evolved from being just an academic concept to virtual reality with the introduction of Bitcoin.
A few years after its introduction, Bitcoin earned a massive following. However, it generated relevant media (and investor) attention in April of 2013 when it peaked at $266 per bitcoin after it surged 10-fold two months preceding.
At its peak, Bitcoin’s market value reached over $2B but the 50 percent plunge after ignited a debate on its future in particular and that of cryptocurrency in general.
Until now, there are varying takes on whether or not these alternative currencies will become as ubiquitous as euros and dollars someday or it will turn out to be just another passing fad. For many, the answer lies in Bitcoin.
The Current Standard
Bitcoin is a decentralised currency that makes use of peer-to-peer technology. Said technology makes it possible for a network to collectively carry out certain functions like transaction processing and verification and currency issuance.
While the decentralisation enables Bitcoin to be free from government interference and manipulation, the downside is no central authority can back its value and ensure things run smoothly.
Bitcoins are digitally created through mining. The mining process will entail powerful computers to solve crunch numbers and complex algorithms. Currently, the rate of creation is 25 Bitcoins every 10 minutes and will be capped at 21 million. Said level is expected to be reached by 2140.
Above mentioned characteristics has made Bitcoins different from fiat currency. Backed by the credit and full faith of its government, the fiat currency is highly centralised and is supervised by the nation’s central bank.
While the amount of currency issued is regulated by the bank in accordance with their monetary policy objectives, there is theoretically no cap on the amount of currency they can issue.
The Future of Bitcoin
While there is evidently a steady increase of merchants accepting cryptocurrencies, they are still deemed in the vast minority. For cryptocurrencies to be used widely, they need to be widely accepted among consumers first. However, their complexity compared to traditional currencies often deters most except those who are highly tech savvy.
In addition, cryptocurrencies that aspire to be part of today’s mainstream financial system need to satisfy some criteria. For instance, to avoid hacker attacks and fraud, it would need to be complex mathematically but at the same time easy for consumers to comprehend.
And while it is decentralised, there should be sufficient consumer protection. Also, anonymity should be preserved without it being used for money laundering, tax evasion, and other shady activities.
Investing in Cryptocurrencies
If you are thinking of investing in cryptocurrency, consider it wise to treat your investment like you would all other ventures that are highly speculative. In other words, you should never lose sight of the merits and risks involved.
However, if you still want to invest but would like to play it safe, it will be in your best interest to seek the guidance of a competent cryptocurrency consulting agency like Kryptoia.
From ICO fundraising down to marketing, they have it all covered. In addition, they can help ensure ICO fundraising and any other ventures related to your cryptocurrency business is a success since they know the industry like the back of their hands.
As a general rule of thumb, don’t hesitate to ask for expert help when it comes to investing in cryptocurrency. Doing so will help ensure your investment will not only thrive but it is also safe.