What is cryptocurrency?
A cryptocurrency is a method of payment that is traded electronically. Cryptocurrency “tokens” are commonly exchanged for a service or product. While there are just under seven thousand currencies, only a few of them are well-known and valued highly; popular cryptocurrencies include bitcoin, dogecoin, and ethereum. Many skeptics of cryptocurrency are concerned about the digital currencies’ security: are virtual currencies secure enough to invest large sums in the loosely regulated online economy? The blockchain-backed technology used in the exchange of cryptocurrencies helps to maintain security among portfolios.
What is the cause of cryptocurrency’s popularity?
Many investors see cryptocurrencies as the dominant international currency of the future. Others want to get a head start while prices continue to climb. Another reason for the “crypto-boom” is that many leading economists believe that in reducing the reliance upon economic intermediaries, such as banks, rates of inflation will decrease. On the more cynical side, some speculators don’t envision “crypto” as a player in the economic future; they only invest in cryptocurrencies to turn high profits quickly and withdraw their virtual fortunes.
“You can’t do anything with it except sell it to somebody else. But then that person’s got the problem.”
– Warren Buffet
Interest in cryptocurrency is increasing rapidly. Many investors are intrigued by the market capitalization of leading cryptocurrencies. Bitcoin, one of the most well-renowned and notoriously volatile of the currencies, reached an apex market capitalization of over a trillion dollars.
The “Crypto-Crash”
In the weeks following cryptocurrencies’ peak valuation on May 12, the industry crashed. On the morning of Sunday, May 23rd alone, the market value of all of the global cryptocurrencies slid by three-hundred billion dollars. Some tokens’ values decreased by as much as fifty percent, leading to disappointment and anxiety among investors and speculators alike.
“We [at Tesla] are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea… but this cannot come at great cost to the environment.”
– Elon Musk
So, will cryptocurrencies dominate our planet’s economic future? It’s hard to tell right now. Recent volatility has reinforced widespread skepticism of the industry as a whole. Over time, the success and dominance of cryptocurrencies will become clearer.
0
0
Average Rating