Cryptocurrency: Are We Really Ready To Demonetize The World?

Cryptocurrency
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Liza Minnelli famously sang Money makes the world around in the movie Cabret somewhere trying to say from century’s money was a central part of human relationship. Harold James writes money has been always an expression of sovereignty; even states fail to resume their guarantee. In this highly changing global economy, the so-called cryptocurrency is all set to bring revolution however it doesn’t possess the entire contributes of the money made in history.

Currently from Bitcoin, Dogecoin to Tether and Ethereum, there are thousands of cryptocurrencies a person can see when he enters the crypto world. As most of the cryptocurrencies run on blockchain technologies, a ledger loading transactions, the payment order will be carried out without revealing the ID probably create value-added assets in the long run (Delmolino et.al, 2016). Since the great recession disrupted the whole financial system, such creation also fueled crypto assets.

Two years ago when we first heard the magical instrument, “Internet” prominent economists and bankers wonders whether this technology would be able to reform the obsolete central bank’s system or not. In view of the fact that all these predictions haven’t passed, the rise of cryptocurrency spark the debate again, Does digital currency reduce the demand of fiat currency possible central bank capital? For the first time when Bitcoin values fall drastically in the fourth year 2021, the question even becomes more necessary to be answered, are we really ready to demonetize the world with cryptocurrency?

What Is Cryptocurrency?

A cryptocurrency or virtual coin is providing secure ownership and transaction using blockchain technology. Cryptographic problem is utilized in the formation of cryptocurrency to ease the computational difficulties to arrive at a solution. Many companies often develop their own cryptocurrency called token coins uses for trade and exchanging goods and services. 

The majority of the cryptocurrency is developed using blockchain or decentralized technology. The future outlook of cryptocurrency yet aspiring and confusing when different perspectives and historical events are covered. Bitcoin i.e. decentralized currency uses peer to peer technology only to enables several functions such as currency issuances, transaction processes and verification carried using different networks. This renders the cryptocurrency free from government manipulation or central intervention. Cryptocurrencies are created using manual processing requires powerful algorithms and crunch numbers (Liu, & Tsyvinski, 2021). 

From the time when central banks and institutions were established, fiat currency is a highly regulates amount of currency being issued as per monetary policy objectives. There will be no such issuance guaranteed how much currency values will be manipulated. Assignment writer said In the case of Bitcoin, DogeCoin, there will be no such support mechanism. The value of the cryptocurrency is singly dependent on how much investors want to pay. 

A Short History Of Bitcoin 

Bitcoin exited in 2009, but the popularity it has gained came into the light in the year 2017 when the price of a single Bitcoin passed $11500. In the same year, if you invest merely $1000 in bitcoin you might incur a profit of £36.7 million. So those who are thinking to invest in Bitcoin must have a look at the past events-

1998-2009- Pre Bitcoin years

The first established Cryptocurrency Bitcoin by an anonymous person Santoshi Nakamoto starting first blockchain or genesis of the chain. Nakomata himself first mined the 50 bitcoin in the same year won accolades from the digital currency creators. Nokomata is the not only person who mysteriously developed Bitcoin, what’s more, but an inscrutable team at Google also exchanged bitcoin core technology for a time. However both the team and Nakomota himself limiting his online utterance in the technology discussion

2009- An opening year of Bitcoin

On January 3 2009, Bitcoin was available to the public for the first time, the process through which bitcoin mined and the process started in huge amount. Mysterious Nakomota published a mailing list discussing cryptography. 

2010- Bitcoin Values Start Lifting Up

As bitcoin never have traded only mined, it would be impossible to locate the value to emerging cryptography units. In 2010, someone finally has decided to sell the Bitcoin swapping 10000 for buying two pizzas. If the buyer hung up those values of Bitcoin, it could have reached $100 million today

2013- Collison of Bitcoin Prices

Shortly but sooner when the bitcoin prices reached $10000 for the first time, the price declines quickly. Many of them who invested at this stage incurs losses and the price plummeted to around $300. Later it takes more than two years to attain the same marking standard.

2014- Scams

Surprisingly, Bitcoin that claimed to be highly secured designed with anonymity encountered the problem of serious theft. It has proven to be alluring and attractive targets for the criminal to change black money. In 2014, the world largest and highly valued Bitcoin exchanged with the Mt. Gox went offline and approximately 85000 values have not been exposed to this date. Investigation still going to know the perpetual value and at today the value of bitcoin has lost would be worth $4.4 million

2016- ICOs and Ethereum

Another cryptocurrency came close to steal the Bitcoin market, reputation enthusiasm has grown over the years. Ethereum platform renders a crypto coin- ether usually facilitated by the Blockchain-based smart apps and products. Ethereum arrival is also marked with the entering of ICOs or Initial coin offerings. However in the US SEC warned the investors due to the oversight view of ICOs (Merr, 2017). To know more about Ethereum for your cryptocurrency assignmentstake instant assignment help from SourceEssay.

2017- Bitcoin Started Growing Again 

A gradual stance has been identified responsible for the growing popularity and high investment in the year 2017. When more and more users get connected, its pricing values automatically reach the pinnacle. The following the market value of Bitcoin and all associated cryptocurrencies made it clear that money was flowing from Bitcoin to the cash flow system. Bank like Barclays, City Bank, Deutsche, BNB Paribas, generated a statement and said, they are looking for ways they can ably work with Bitcoin and another cryptocurrency (Jani, Shailak. 2018).

2021- Bitcoin Wasn’t a popular trade coin

Despite the fact the Bitcoin popularity has surged in 2020 and 2021, in a study of Statista, 2021, it has foreseen, Bitcoin was not a frequently traded coin even that was a tether. Based on the exchange in 24 hours, the company has calculated the exchange rate and concluded Bitcoin and Tether were the only two virtual coins costing $100 million in the US, however, Ethereum has achieved a place lesser in this race, So does it mean Ethereum is not performing on a trading level both at nationally or internationally. Discover this answer with essay typer of SourceEssay known for producing the best thesis on Cryptocurrency.

Source- Statista, 2021

Future Of Cryptocurrency, 2021

Every disruption is a source of opportunities. In the 19th century when Alexander Graham Bell was awarded a patent, the only way to communicate rapidly using the telegraph, the dominant company in that market said, graham invention was a useless toy. The rest is history and all we have known. 

But the reason behind illustrating this anecdote, that unpredictable technology invention is not acceptable in past. At present many economists, essay makers, believe cryptocurrency is a breakthrough in the financial system, on the other hand, some believe cryptocurrency is a fraud. 

Cryptocurrency is merely an example of how financial services can be delivered online without intermediaries, As the globe has seen the financial crisis in 2008, the three important lessons yielded by Christine Lagarde Managing director of IMF-

Lesson One- Trust is the base of the financial institution, and if it is fragile, it would be collapsed anytime

Lesson two- Risk always takes place at the most unexpected time interval

Lesson Three- In this globalized world, financial shaken quickly reverberate within nations, 

Above all things, we just kept in mind, cryptocurrency is the emergence of innovation not because they are risk posing elements, but in some way, they can transform our lives in a better way.

Moving onwards, in the same study, STEFAN INGVES is the governor of Sveriges Riksbank, the central bank of Sweden, said, if fiat currency has had its days, this could be said, one day the entire things will going be cashless. But in this process, it is significant for the central banks to make it clear cryptocurrencies are not currency even they are high-risk investments (IMF, 2018). He never sees cryptocurrencies as capital as they don’t feel the three necessary features of capital be it making offline payments, availability, store value. 

Crypto Assets May Reduce The Demand of Fiat Currency One day

Some cryptocurrency like Bitcoin has shown lower impact due to inflation rate. Though they lack three major functions stabilize the currency such as protection against deflation, ability to respond quickly. a temporary shock given to money due to disruption in business activity and last capacity to perform as a last resort.

But will they be highly utilized in the future? This is still a questionable statement and the answer to this is surrounded by scepticism. Perhaps better issuance rules, integration of machine learning and artificial intelligence, have the potential to bring stable valuation. 

As it can be a medium of exchange, it could generate several advantages in terms of Marathon digital holding. Cryptocurrency offers much of the anonymity to the cash allowing heavenly transactions at a longer distance that can be potentially not divisible. 

Unlike bank transfer, Cryptocurrency can be settled quickly and cleared without any interference. The advantage is largely adhered to by the cross border traders which are opaque, costly and cumbersome. Some cryptocurrencies will eventually be more acceptable in the future and full the requirements of money in some regions especially in the private networking area (Mukhopadhyay, et.al, 2016). 

In a broader sense, the large shift of the payment and wider adoption of the ledger technology can shift the account-based payment system. The contrary account-based system will be replaced by the token aided system involving simply a transfer of the capital from a commodity. This payment shift could push the way money is circulated since Renaissance. In this course we can’t deny crypto assets will not base on credibility or liabilities, eventually, it will remain as a money transfer between the commodities

The uncertainty over the future prediction of the cryptocurrency will constantly remain debatable as many economists disagree with the massive adjustments in the financial system with the invasion of cryptocurrency. Therefore it can be said, the central bank needed to make fiat currency more and advance stable units and accounts

Conclusion

Cryptocurrency or crypto-assets is the new most attractive payment model boosting the companies to generate revenues from the past decades. It created using manual processing requires powerful algorithms and crunch numbers. With time many companies often develop their cryptocurrency or token coin uses for trade and exchanging goods and services. In this study, we have concluded the major success and failure of Bitcoin and one of the largest trading coins Tether. This study concluded, although Bitcoin is the highest pricing holding cryptocurrency still lagging behind in terms of the exchange rate at the global level. Further, we have tried to enumerate several past and present events that could determine the future outlook of cryptocurrency. Thereafter we reached a conclusion, despite generating enormous benefits to the commodity, the future of cryptocurrency lies in scepticism. Many economists disagree with the massive adjustments in the financial system with the invasion of cryptocurrency because it will hamper the whole central bank system. However financial institutions still thinking to adopt this currency in future if transparency can be explored. 

References

Delmolino, K., Arnett, M., Kosba, A., Miller, A., & Shi, E. (2016, February). Step by step towards creating a safe smart contract: Lessons and insights from a cryptocurrency lab. In International conference on financial cryptography and data security (pp. 79-94). Springer, Berlin, Heidelberg.

Jani, Shailak. (2018). The Growth of Cryptocurrency in India: Its Challenges & Potential Impacts on Legislation. 10.13140/RG.2.2.14220.36486.

Harwick, C. (2016). Cryptocurrency and the problem of intermediation. The Independent Review, 20(4), 569-588.

IMF. (2018). Money transformed, The future of currency in the digital world. Availableat- s https://www.imf.org/external/pubs/ft/fandd/2018/06/pdf/fd0618.pdf data accessed on 22 july, 2021

Marr.B.(2017). A Short History Of Bitcoin And Crypto Currency Everyone Should Read. Available at- https://www.forbes.com/sites/bernardmarr/2017/12/06/a-short-history-of-bitcoin-and-crypto-currency-everyone-should-read/?sh=3d8ccd9f3f27 Data accessed on 22 Jul. 21

Liu, Y., & Tsyvinski, A. (2021). Risks and returns of cryptocurrency. The Review of Financial Studies, 34(6), 2689-2727.

Mukhopadhyay, U., Skjellum, A., Hambolu, O., Oakley, J., Yu, L., & Brooks, R. (2016, December). A brief survey of cryptocurrency systems. In 2016 14th annual conference on privacy, security and trust (PST) (pp. 745-752). IEEE.

Statista,(2021). Biggest cryptocurrencies in the world based on 24h volume on July 13, 2021. Available at- https://www.statista.com/statistics/655511/leading-virtual-currencies-globally-by-purchase-volume/ Data accessed on 22 Jul. 21

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