With the 10th birthday of bitcoin approaching very rapidly in January 2009, the idea of cryptocurrency seems quite aged. And did it really take off in the first place? Here, at Viral World, we are looking into its past, present and future.
Development of Cryptocurrency
Cryptocurrency is a way of carrying out secure financial transactions using a de-regularised currency that is not controlled centrally by the government. It uses strong cryptography as security and verification, making it a preferable choice of currency. Initially, cryptocurrency began when unknown developer Satoshi Nakamoto created bitcoin and was intended to simply by “A Peer-to-Peer Electronic Cash System”, not a currency. Since then, there have been many forms of altcoin produced.
Nowadays, bitcoin can fetch you a pretty penny, considering that its value has skyrocketed since it was conceptualised. In 2009, the value of bitcoin was basically nothing and it increased to $750 in 2014 until it skyrocketed to $17,900 in 2017. In 2018, the value of bitcoin has settled to $6,301. So, whilst it is not a stable form of currency, it can be beneficial to anyone who owns bitcoin because it is not state controlled and therefore relies on supply and demand.
Advantages And Disadvantages Of Cryptocurrency
* Blockchain – This technology is an open database that can record transactions and in a verifiable manner. It also allows users to track their coins through every account. With this, it is difficult for mischievous users to forge or steal bitcoin. The blockchain is also public, displaying every single transaction that has ever taken place, so that they are easier to track.
* Easy Access – Cryptocurrency is readily available to the public and anyone can use it. Also, it is decentralized so investors worldwide can access it.
* Quick and Easy – It takes just a matter of seconds because of the fact that you don’t need to fill in as many details. All you need is the address of the person or company.
* Privacy – In this modern world, we really value our privacy and cryptocurrency allows that. You do not need to share your identity or whereabouts with anyone, including the government as it is decentralized.
* Security – Cryptocurrency uses high standard cryptography to protect your transactions and it is nearly impossible for a person to make a payment from your wallet.
* Less expensive – Transferring money any other way is considerably more expensive as they charge fees for transaction. This is not the same with cryptocurrency as there are no charges as the buyer pays a small fee instead of the seller.
* Knowledge barrier – With cryptocurrencies being relatively new in comparison to the existence of physical and centralised currency, many people still prefer to use the latter because it is easier to understand. If you are going to use cryptocurrency, make sure that you fully understand its use as well as how to protect yourself from hackers.
* Not yet accepted everywhere – Only a small percentage of websites and companies actually accept cryptocurrency as currency, which makes it impractical for every day use. So, even though it is being accepted in more places daily, this process may be slow.
* Misplacement – If you lose your wallet, phone or computer then you have lost your digital coinage forever. So, it is not for those that would forget their heads if it wasn’t screwed on.
* No Refunds – If you mistakenly pay the wrong person or pay the wrong amount, there are no reverse payments. All you can do is hope that the person is kind enough to refund you.
* Volatility – Cryptocurrency is not yet being adopted by the majority of companies. Therefore, its existence is extremely uncertain when it comes to the future.
The Legality Of Cryptocurrency
Cryptocurrency is growing, there is no doubt about that. However, there are concerns about its legality depending on the country that you go to. As it stands, cryptocurrency is legal tender, but it depends on the country as no global regulator currently exists. We looked into just a few countries and their legal stance on cryptocurrency.
In Japan, cryptocurrency has been considered legal tender since April 2017 as long as the exchanges are registered with the Japanese Financial Services Agency. This makes Japan the largest market for bitcoin and other digital currency. They have now installed several measures to prevent hackers from infiltrating cryptocurrency as well as punishment notices for theft of the currency.
The United States does not see cryptocurrency as legal tender and doesn’t have any jurisdiction despite handling the second largest volume of bitcoin (roughly 26 percent). However, depending on the state, exchanges are legal. However, they are currently looking into ways that they can apply more security to the use of cryptocurrency to prevent people from getting hacked. As it stands, cryptocurrency is considered property rather than currency.
Switzerland is one of the friendliest countries when it comes to cryptocurrency. It is legal there as long as the person is registered with the Swiss Financial Market. “Cryptovalley” is situated in Switzerland and houses many major blockchain companies. The Swiss National Bank Chariman admits that he sees bitcoin as an investment and the Economics Minister wasn’t to make Switzerland a “cryptonation”, which is looking likely.
The Future Of Cryptocurrency
It’s quite clear that although cryptocurrency is in its early stages of development and is therefore still volatile, it is not going anywhere soon. With the technological developments of the future, any limitations that cryptocurrency still faces like hacking and computer crashes will eventually be overcome, making it a more stable and viable opportunity. More and more companies are now accepting cryptocurrency but whilst this is generally positive, it also has a major disadvantage. As cryptocurrency is more widely used, there will be more calls for it to be government regulated, which defeats the function of cryptocurrency. However, it may be wort investing in cryptocurrency if you have the stomach for it.