From revolutionary blockchain technology to significant steps towards mainstream adoption of crypto as a payment service, cryptocurrency has seen unprecedented development this year. But still, when we open up our imaginations to a future of cryptocurrency integrated into society, there are still many questions unanswered.
Bitcoin is the gold standard in the cryptomarket but has still only been in existence for a little over a decade. The prices of major cryptocurrencies like Bitcoin and Ethereum make up some of the most significant increases in any asset in the world—whether you believe in the value of digital currencies or not, this cannot be ignored. While it’s the dips, rises and volatility of the market that makes the headlines, Bitcoin is the eighth-most valuable asset in the world, just behind silver at around $1.3 trillion.
Evolving technologies and significant steps towards established regulation means the future is starting to take shape for cryptocurrencies. Huge moves from major financial institutions have added credence to what was seen as an underground industry.
JPMorgan Chase CEO Jamie Dimon recently said “I personally think that bitcoin is worthless,” while simultaneously offering clients a range of cryptocurrency investments to add to their balance sheets. This kind of contradictory statement will excite crypto evangelists, but it’s the acceptance of digital assets from long-standing financial establishments that should light the fire of enthusiast crypto collectors.
There is still the lingering possibility of federal regulators coming in and creating a central bank digital currency (CBDC). While the possibility is certainly unappealing to those that back DeFi, many experts are beginning to back the potential of innovative blockchain technologies. Cryptocurrency could certainly transform the future—but how?
Current Blockers From Integrating Cryptocurrency
We’re already seeing how things will shape up in terms of payment for everyday goods and services as they appear to look much the same as the system we already have today. A common doubt about cryptocurrency integration is that people don’t understand how blockchain works. But, even with fiat currency, the vast majority of people don’t understand the inner workings of electronic payment systems, they just use them.
The main hurdle is finding a currency that would work universally. As it stands, Bitcoin is the most credible currency and one that merchants and payment companies like Visa and Mastercard are facilitating for buyers. Another major issue for the biggest currencies like Ethereum and Bitcoin is the market volatility. Expecting companies to fully integrate a currency that has such extreme price fluctuations is complicated. However, regulation is right around the corner, as governments the world over position themselves to manage the high public demand for access to digital assets. It’s going to be a long and complex road to reach a point where regulation works, but as crypto evolves it will bring a level of stability to the markets.
Another issue that crypto currently faces is that it intends to compete against existing systems that have been in existence for as long as finance has been relevant. Within the cryptocurrency bubble, it seems like there is no other way forward. But, the reality of the situation is payment systems are still in place and the vast majority of the people across the globe have little to no interest in digital currency. As it stands, investment in crypto is purely based on potential. The best aspects of blockchain technology are scattered across a handful of coins. Take bitcoin, for example, the most valuable asset in the crypto world, its blockchain isn’t anywhere near as scalable as a layer-1 blockchain like Elrond eGold—technology on the market with far less investment. New technologies now need to be green, stable, reliable, safe and offer seamless integration. Ultimately, the hype is real, but only once blockchain realizes these criteria will it be adopted en masse due to its superiority over its competition.
Integrated Cryptocurrency In The Future
Stablecoins are pegged to a reserve asset, commonly the U.S. dollar, but are not registered with the central bank. The government is undecided on how to handle the situation, citing the possibility that the reserves backing these coins might not have the capital to back any dramatic market issues. If the U.S. government tabled the possibility of giving regulators more jurisdiction, a major coin like Tether could function as an established stablecoin.
One advantage is helping those who have issues banking money, as they deal in cash; this could extend to unbanked citizens, small businesses, the like street vendors and performers. There is also the option for digital currency enthusiasts to have their money entirely in cryptocurrency. While this is certainly an option, it may be met with some resistance. The regulators will have their say and we’ll soon see whether stablecoins could be integrated.
As well as stablecoins, the prevalence of cryptocurrencies is based on the fact that blockchain technology already possesses the ability to make payment systems more efficient, safer, and more reliable. The decentralized design of cryptocurrencies certainly separates them from stablecoins in terms of regulation, as they’re not backed by any reserve asset. Bitcoin is a carefully designed system to allow for swift and secure payments peer-to-peer through a unique financial system. The scarcity of Bitcoin makes it a particularly valuable asset, but it’s based on supply and demand.
There are a plethora of use cases for cryptocurrencies, which are being realized in a variety of exciting projects across all kinds of industries. The instability of the markets makes them less likely to be integrated as a currency outright. However, they are a valuable, desirable asset making them something that will continue to increase in value, as cryptocurrency moves into the mainstream.