Are Bitcoin and other cryptocurrencies the future of currency?

Many banks are questioning the impact that digital currencies will have on their business, however, as  some banking executives are starting to realise that cryptocurrencies could provide a way for banks to highlight the security of banking systems in comparison to cryptocurrency technologies. Once you understand the nature of money then you can understand that as long as you can trust in its ability to stand the test of time (durability) and can keep immutable records of how much value you have consumed vs produced then it can act as money. Money is just a form of information.  Information is most efficiently stored in digital form.

Let’s see the example-Similar why facebook is most popular social network web site.
To benefit most from first application of Bitcoin – bitcoin currency, you need a network of people spending it and accepting it. The network effect must not be underestimated. Actually usefulness of bitcoin currency is growing with the square of participants inside it (Metcalfe’s effect). For this same reason most money flows into cryptocurrency which gives it even infrastructure advantage (new applications, etc….).

The low liquidity of Bitcoin also plays a part in how it has been welcomed onto the trading field, as liquidity often determines how many partners are willing to trade with it. believes that the low liquidity of cryptocurrencies means they are often seen as a high risk investment because of these ,Many governments and financial institutions seem to be having a ‘wait and see’ approach towards cryptocurrencies. Some experts believe that digital currencies will disappear as quickly as they arrived, whereas others believe they will become a normal way of paying.

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As more digital currencies are introduced into the cryptocurrency market, there is greater opportunity for competitors to develop a cryptocurrency that overtakes Bitcoin. The cryptocurrency of the future might be the future of money if it can provide greater liquidity and stability than Bitcoin.

something that will definitely be realized in the next 10 years is Bitcoin 2.0 applications, higher level uses of the underlying blockchain technology that will permeate into many more applications that just currency. The Internet of Things may very well be supported by a blockchain infrastructure. Apart from this bitcoin protocol solved a “hard problem”, it is an ingenious piece of technology; and it was released alongside the namesake cryptocurrency that implements it and It is the first of its generation, has the most hashing power , people like the idea of Satoshi Nakamoto as the anonymous, mysterious figure behind it. It all show that Bitcoin and other cryptocurrencies has a potential power of future currency.

See also  Should I invest in Bitcoin now? Why? 

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