Important information: This is a sponsored story. Please remember that the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. If you are unsure of the suitability of your investment please seek advice. Tax rules can change and the value of any benefits depends on individual circumstances.
How do cryptocurrencies work?
At their core, cryptocurrencies are either the “purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution” that Bitcoin’s anonymous creator Satoshi Nakamoto described, or the smart contracts that turn Bitcoin’s transactions into agreements with enforceable terms.
How does cryptocurrency work? It works by taking trust — or really the lack of trust — out of financial transactions. Banks, credit cards, stock exchanges, and other financial institutions are basically trusted intermediaries. The two peers buying cryptocurrency need their support to ensure the payment goes through. Because blockchains are immutable — unchangeable — and transactions (but not identities) are public, Bob can’t reverse payment for the car he bought from Mary after she hands over the keys. Nor can Mary claim Bob didn’t pay her.
Benefits of cryptocurrency
There are a lot of scenarios for the future of cryptocurrency. The goal of the first cryptocurrency, Bitcoin, was essentially pushing banks and even governments out of online commerce altogether, creating a decentralized economy. A blockchain-based Web3 could do the same for the Internet, making it safer and far more private.
However, those are all mighty tall orders. Crypto does look like it might weaken the stranglehold financial institutions have over ecommerce, making payments cheaper and shopping more private.
Then again, the future of crypto might not be bright. Cryptocurrencies like Bitcoin could collapse like the Tulip Bubble — they are backed by nothing other than people’s agreement that they have value. Or, cryptocurrencies’ future could be being regulated out of existence — something China is trying with its late-2021 cryptocurrency trading ban.
What is the future of cryptocurrency?
Assuming governments don’t — or as Nakamoto believed, can’t — regulate crypto into oblivion, or that the financial institutions and tech giants don’t manage to co-opt blockchain technology’s cost, speed, and security advantages without the decentralization of power it is capable of, the future of crypto is effectively a revolution in which consumers take back control of their financial lives.
Another version of the future of crypto has much of the digital payment market co-opted by governments. A growing number of central bankers, finance ministers, and government officials believe that the best cryptocurrency for the future is the central bank digital currency — or CBDC. These nationally issued, probably blockchain-based cryptocurrencies would be legal tender. They would also make tracking citizens’ spending even easier than it is now — something CBDC-leader China has made clear is a key goal of the forthcoming digital yuan.
The future of regulation in cryptocurrency
One of the most pessimistic future crypto predictions is that it will be regulated out of existence. It’s not that far-fetched. In September 2021, China essentially did just that — or tried to at any rate — when it banned trading in crypto altogether. And the U.S. Securities and Exchange Commission’s crypto-savvy new chairman believes almost all cryptocurrencies are security tokens — investment products that the SEC can and will regulate. Which would make future cryptocurrencies almost unusable. However, plenty of U.S. elected officials and other major economies’ regulators disagree.
What is the next big cryptocurrency?
So, what is the next big cryptocurrency — the best future cryptocurrency to invest in? The top future cryptocurrency is probably either Bitcoin or a utility token like Ethereum and its smart-contract-platform competitors.
Bitcoin because all of those banks, hedge funds, Wall Street investors, and even private corporations piling into it as a store of value are making eight-, nine-, and 10-figure buys that they intend to sit on. That will decrease the supply dramatically and drive prices way up.
Ethereum and the would-be Ethereum killers because they have the potential to remake the cryptocurrency future into one in which the internet economy’s tech giants are replaced by decentralized apps with no corporate control or costs.
Source: Read Full Article