The Future with Bitcoin
A Bitcoin is a digital currency that is created through the use of advanced encryption techniques known as cryptography. Bitcoin made the hype from being an academic concept to VR with the creation of Bitcoin in 2009. While Bitcoin attracted a growing following in subsequent years, it captured significant investor and media attention in April 2013 when it high at a record $266 per bitcoin after surging 10-fold in the preceding two months. Bitcoin market value of over $2 billion at its peak, but a 50% plunge shortly.
Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. Some predict that all those crypto needs are verified exchange-traded funds.
Understanding The Bitcoin
Bitcoin is a decentralized currency that uses P2P technology, which enables all functions such as currency issuance, transaction processing, and verification to be carried out collectively by the network. While this decentralization renders Bitcoin free from government manipulation or interference, the flipside is that there is no central authority to ensure that things run smoothly or to back the value of a Bitcoin. Bitcoins are created digitally through a “mining” process that requires powerful computers to solve complex algorithms and crunch numbers.
Bitcoin Future and Scrutiny
The future of bitcoin is the subject of debate. While the financial media is proliferated by so-called crypto-evangelists, Harvard University Professor of Economics and Public Policy Kenneth Rogoff suggests that the “overwhelming sentiment” among crypto advocates is that the total “market capitalization of cryptocurrencies could explode over the next five years, rising to $5-10 [trillion].”
Bitcoin’s main benefits of decentralization and transaction have also made it a favored currency for a host of illegal activities including money laundering, drug peddling, smuggling, and weapons procurement. This has attracted the attention of powerful regulatory and other government agencies such as the Financial Crimes Enforcement Network, the SEC, and even the FBI and Department of Homeland Security.
Other Cryptocurrencies
Litecoin – Litecoin is regarded as Bitcoin’s leading rival at present, and it is designed for processing smaller transactions faster Bitcoin Value. It was founded in October 2011 as “a coin that is silver to Bitcoin’s gold,” according to founder Charles Lee.
Ripple – Ripple was launched by OpenCoin, a company founded by technology entrepreneur Chris Larsen in 2012. Like Bitcoin, Ripple is both a currency and a payment system. The currency component is XRP, which has a mathematical foundation like Bitcoin.
MintChip – Unlike most cryptocurrencies, MintChip is actually the creation of a government institution, specifically the Royal Canadian Mint. MintChip is a smartcard that holds electronic value and can transfer it securely from one chip to another.
Future of Crypto and Invest in Cryptocurrencies
Some of the limitations that cryptocurrencies presently face such as the fact that one’s digital fortune can be erased or deleted by a computer crash, or that a virtual vault may be at risk by a hacker may be overcome in time through technological advances. The more popular they become, the more regulation and government scrutiny they are likely to attract.
If you are thinking of investing in cryptocurrencies, it may be best to treat your “investment” in the same way you would treat any other highly speculative venture. This makes it very susceptible to huge price swings, which in turn increases the risk of loss for an investor. Bitcoin, for example, plunged from $260 to about $130 within a six-hour period on April 11, 2013. If you cannot stomach that kind of volatility, look elsewhere for investments.
Conclusion
The emergence of Bitcoin has sparked a debate about its future and that of other cryptocurrencies. Despite Bitcoin’s recent issues, its success since its 2009 launch has inspired the creation of alternative cryptocurrencies such as Ethereum and Ripple etc. A Bitcoin that aspires to become part of the mainstream financial system would have to satisfy very divergent criteria. While that possibility looks remote, there is little doubt that Bitcoin’s fluctuation in dealing with the challenges it faces may determine the fortunes of other cryptocurrencies in the years ahead.
