Cryptocurrency and its Future

Source:http://www.fintp.org/

The top cryptocurrencies are worth much more than any other physical currency in the world. According to a online cryptocurrency news page The first cryptocurrency was Bitcoin which was created by Satoshi Nakamoto, all of the cryptocurrencies that came out after Bitcoin use the system that Nakamoto created. Cryptocurrency is a decentralized online currency that allows people to purchase goods while maintaining a high level of anonymity.

1. Cryptocurrency is “a medium of exchange like normal currencies such as USD, but designed for the purpose of exchanging digital information.” There are about 20 different cryptocurrencies that actually have a significant value. Bitcoin remains the most valuable with its current value at $705. The reason Bitcoin is worth so much more than any other cryptocurrency is because it was the first cryptocurrency created and all the other cryptocurrencies are based off of it.
2. One of the main reasons people choose to use digital currency is because “unlike centralized banking, like the Federal Reserve System, where governments control the value of a currency like USD through the process of printing fiat money, government has no control over cryptocurrencies as they are fully decentralized.” This means that cryptocurrencies are not affected by inflation or by any specific countries demise like a normal currency would be. This interests potential investors because they think it is easier to predict its future value.
3. Basically cryptocurrencies are “electricity converted into lines of code with monetary value. In the simplest of forms, cryptocurrency is digital currency.” Cryptocurrency is similar to normal currency in the sense that there is a limit to the quantity available at any given time. The less there are available the higher the demand thus driving the price up.
4. A main difference between cryptocurrencies and normal money is that, “cryptocurrencies are designed to decrease in production over time like Bitcoin, which creates a market cap on them. That’s different from fiat currencies where financial institutions can always create more, hence inflation.” Right now 72% of Bitcoins have already been mined, when the other 28% get mined a Bitcoin is predicted to be worth more than $10,000.
5. Certain people are hesitant to invest in cryptocurrencies because they have a reputation of being hacked but, “Cryptography is used to secure the transactions and to control the creation of new coins.” This will prevent future Mt. Gox (a Bitcoin hack in which $400 Million was lost) situations from ever happening again.The limit on the amount of cryptocurrencies being released into the public shoots up their value but if release too much into circulation it has the potential to backfire and actually drop the price due to the excess of cryptocurrency available.

Cryptocurrencies are predicted to become much more accessible and more widely used in the near future. With Bitcoins expected to be worth much more that $10,000 by 2018 many people are trying to invest in them now while the value is still low and while there is still some left still to be mined. As long as cryptocurrencies continue to be decentralized and unregulated they will be the future of online currency.