Cryptocurrency is a decentralized digital currency that remains free from any Government manipulation. At present, there are thousands of cryptocurrencies that work on the technology of blockchain. Blockchain is a network of computers that maintains information of all transactions. At present, there are around 47,000 nodes in the world that maintain the digital ledger.
Cryptocurrencies are so volatile that their prices can shoot up in a matter of a few hours. Owing to this characteristic they are bound to be risky.
| Despite being a very risky and volatile investment, the market capitalization of bitcoin (the first cryptocurrency) is more than the GDPs of 80% of countries of the world. |
The supply of bitcoins cannot exceed 21 million in number; out of which 90% have already been mined (created) and the last one is expected to be mined by the year 2140. Addressing the fact that it takes up to 1 hour to complete the transaction of one bitcoin, newer cryptocurrencies were (and are being) introduced that can create an unlimited number of coins and take minimal time to process a transaction. This kind of progress hints at a long future of the cryptocurrency industry.
Some people believe that cryptocurrency can prove to be as beneficial and impactful to humanity as the internet has been. While some are of the perspective that cryptocurrency is a bubble that might burst anytime. However, most of them believe that cryptocurrencies and blockchain are not disappearing at any point in the future. Some of them who publicly back the cryptocurrencies are Bill Gates, Ashton Kutcher, Lionel Messi, etc.
History at a Glance
About the history: Cryptocurrency market has seen a lot of action in its trading history. Bitcoin being the dominant cryptocurrency pushed the market capitalization up to $566.26 trillion in late 2017 (refer to the image above).
| Following the rise there came a crash known as the Great crypto crash and Bitcoin Crash (because bitcoin was and still is the major cryptocurrency). The prices of bitcoin fell by 65%. |
Some investigations verify the reason for the crash being money laundering. In 2014 now-defunct crypto exchange Mt. Gox declared bankruptcy after 8,50,000 bitcoins (worth $473 million then) got hacked. Then soon after the filing of bankruptcy, it got its forgotten 2,00,000 bitcoins in an old-format wallet. After the court proceedings in 2018, Mt. Gox is still liable to pay its creditors the refunds in their original crypto holdings.
Cryptocurrency – Present and the Future
The charts show a positive trend of the cryptocurrency market with market capitalization crossing $1 trillion. Despite economic recessions in the world in 2020 the cryptocurrency market kept growing and is still growing. It has been predicted that bitcoin will close above $30,000 by the end of 2021. Another prediction is that the world would see the digital currencies by the central banks of different countries. Also, blockchain, the basic innovation behind cryptocurrencies is going to see new applications in the upcoming years in the sectors of education, healthcare, land allocation and election systems.
