The future of cryptocurrency: its seven sides
The future of cryptocurrency. Cryptocurrencies have advanced significantly. Supported by cutting-edge technology, blockchain, the idea of a cryptocurrency as a digital asset has permeated many industries. The digital currency is not just considered conjecture. In contrast, they are seen as investment vehicles, payment methods, security tokens that reflect actual assets, and much more in 2020.
The importance and application of cryptocurrencies have grown significantly. The bitcoin market is growing from being only a means of speculation to an instrument for investing. Its applications are not limited to financial transactions either. Conversely, the emergence of digital currencies with diverse uses across multiple sectors has already occurred. We’re going to look at the future of cryptocurrencies today, taking new developments into account.
The sides of a cryptocurrency future
1: Investment vehicles
Prominent companies have been providing services related to the Bitcoin business within the past three years. As a result, investment managers, hedge fund managers, and institutional investors have all begun to show interest in cryptocurrencies. Digital assets are becoming a popular addition to diversified investment portfolios among investors.
Approximately 72% of 400 institutional investors and hedge fund managers surveyed recently expressed a strong desire to participate in digital assets. Retail investors have always been interested in this area. These days, institutional investors are increasingly likely to see cryptocurrencies as financial tools on par with gold and stocks.
2: Easing regulations
Many countries have taken a different stand on cryptocurrencies and digital assets during the past two years. Bitcoin and other cryptocurrencies have been designated as official custodians by the German Financial Authority. The Indian Supreme Court removed the prohibition on trading digital currencies at the same time in 2020.
Governments are now developing rules to offer a legally compliant cryptocurrency trading and investment environment. Countries will probably soon start drafting laws governing the usage, exchange, and storage of virtual currency.
3: Causing disruptions in banking and finance
The financial sector is the first to be by cryptocurrencies, despite the fact that use cases for them are starting to appear in many other areas. The future of cryptocurrency has uses in many different banking and finance industry verticals, ranging from tokenizing financial products to facilitating cross-border payments.
Currently, over 20 nations are investigating the idea of Central Bank Digital Currencies (CBDCs). This study shows that compared to traditional economy transactions, cryptocurrency-based financial transactions have much lower prices. Ninety per cent of US and European banks have reportedly already begun investigating blockchain technology and cryptocurrencies.
4: Exchange hubs
The increasing popularity of bitcoin trading and investments means that there is an immediate need for infrastructure to support this. Due to differences in procedures and methodologies, the current digital bitcoin trading methods are not viable in the long term. Exchange hubs, which offer several solutions on a single platform, are anticipated to appear in the near future.
For example, exchange hubs can be a hybrid liquidity aggregator that offers a one-stop solution for traders to access the best prices in the cryptocurrency market with minimal hassles. Additionally, such an exchange hub enables storing, managing, and buying or selling digital assets from a single portal instead of navigating between multiple interfaces.
5: Mainstream adoption
In addition to being viewed as a tool for investing, cryptocurrencies will probably become increasingly involved in daily life. The idea of virtual money is becoming more and more common. Additionally, using bitcoins as a payment method has many benefits. Retailers, merchants, and organizations have begun to recognize this.
According to a recent poll, 36% of US small- and medium-sized enterprises use Bitcoin as a payment method. As cryptocurrencies become more widely used, this number is probably going to increase in the years to come. Major retailers that took Bitcoin in 2020 include Wikipedia, Microsoft, Burger King, and Starbucks, to name a few.
6: Innovation with Crypto Tokens
In the upcoming years, tokens for cryptocurrencies will likely be with other advancements and technologies. AI, smart contracts, and the Internet of Things (IoT) are examples of this. By combining the latest innovations, tokens will build intelligent tools, support infrastructure, and automate processes.
As an example, an owner can only unlock an IoT device like a smart lock by depositing cryptocurrency tokens into a designated wallet. A smart contract with inbuilt rules can automate this process even further.
7: Decentralized Applications
The blockchain infrastructure can be utilized by decentralized apps (dApps) in a number of industries, including healthcare, gambling, supply chain, logistics, food and agriculture, and so forth.
Tokens backed by cryptocurrencies will power the decentralized application network. These tokens are helpful for gaining access to dApps’ goods and services. The rapid development of dApps across several industries means that in the coming years, there will be a significant increase in the number of digital currencies.
What to expect next?
Digital currencies enabled by blockchain technology have never before had such potential. We will see disruption across a number of industries based on the ongoing projects and improvements in the blockchain and cryptocurrency ecosystem. Even right now, data, analysis, and statistics point to blockchain as one of the most significant inventions of the twenty-first century.
Because of its benefits and the advancements that followed in the Bitcoin space, people’s perceptions of this entire business have changed. The query now reads, “What is the scale of implications of cryptocurrencies for our future?” rather than, “Is there a future for cryptocurrency?”
