Is it a Bubble?
So, many of you will be skeptical about the recent Cryptocurrency "gold rush" and whether you are or aren't invested, one thing's for certain and that is that nothing is certain. Many people claim this to be a bubble much like the Dot-com bubble of the late 90s to the early 2000s; this however feels a little premature and naive to compare this to Cryptocurrency considering there are many differences.
Now, if this does turn out to be a similar situation which follows suit with rising to a point at which it bursts, then do not fear for the near future as with the Dot-com bubble it did not 'burst' until it hit an overall market capitalization of around 3 Trillion Dollars - bear in mind that the current state of the Cryptocurrency market consists of a market capitalization of just under 400 Billion Dollars; not even 15% of what the Dot-com bubble reached before crashing.
Why Do We Need Cryptocurrency?
Anyways, to digress, as a person under 25 I have found myself having many debates and dare I say arguments with those with more life experience than me concerning the future of Blockchain technology and Cryptocurrency itself. Despite the fact that they can usually raise a few good points, it has always come to them asking the same question - Why do we need Cryptocurrency?
Cryptocurrency implements a variety of new technology (I will refrain from getting overly-technical in this post) to improve many different aspects of life in general, whether that is through security, fund transfer or even something as niche as classic car purchasing. Overall, it appears that although there are many coins on the market which may be quick attempts at cash grabs or projects deemed as scams, there are many more helpful and revolutionary projects to outweigh the crap ones. Another fact which makes me feel more secure and should help you too is that less than 1% of Bitcoin transactions are used for acts of an illicit nature, such as money laundering (I will provide a link at the end of this article if you're interested in researching this further).
Issues:
Volatility is an issue right now, and without regulation due to the decentralized nature it is definitely somewhat of a risky investment. However, volatility is also a great thing when used to your advantage. I always get asked whether my investment could "suddenly drop to zero" or if I should "cash out before things go south", but my answer is always the same - My investment likely won't go to zero as long as I'm smart with my strategies and research. If you research a Cryptocurrency and it's project (including the team, the roadmap, etc.) then you can make up your own mind as to whether you see potential in the market for it. By not blindly following other investors and doing your own due diligence you are making a more educated risk rather than a complete gamble. If you choose the right investment and hold it then the profit you see could be incredible. For example, if we take the Cryptocurrency 'Verge', a $1000 investment in January 2017 would now have made you over $13 Million.
Bitcoin:
Bitcoin is of course the market leader in terms of Cryptocurrency and most likely the one that everyone has heard about. So how does Bitcoin work exactly? To put it simply, Bitcoin is a digital and global money system currency which allows people to send or receive money across the internet. Money can be exchanged with minimal transaction fees and with quick speed. Many people wonder why the price of Bitcoin continues to increase and why it will not drop all the way back down. This is due to supply and demand. There are around 16 million Bitcoin, there can never be anymore, therefore it's not like with with government-issued fiat currency where more can be printed and lead to inflation. Considering there are around 7.4 Billion people in the world right now, what happens if one day everyone wants one? The price would sky rocket. Of course that will most likely never be the case, but in a more realistic sense, the demand will always be increasing and the supply cannot increase to match that therefore causing the price keeps climbing upwards.
So Why is it the Future?
Now to conclude I will directly address the title of this post. Cryptocurrency is the future, at least I think so, and if what I've already stated hasn't convinced you then I will leave you with a few closing points to help.
Each Cryptocurrency has a dedicated team behind it which in a lot of cases their day job is to work on the project, therefore many will not become redundant and will consistently be working towards achieving the roadmap goals, whilst adding more and more features, giving each currency a real world use case. Much like actual companies, the more the currency achieves, the more value it has.
Regardless of the doubt and skepticism concerning the Cryptocurrency market, Blockchain technology will be substantial in the future for coders, programmers, and many other people considering its wide possibility of applications which are available.
At the end of the day, all investment has risk and that is what not only makes it exciting but in most cases the larger the risk factor, the larger the reward. Lastly, I'm not telling you to invest in it, but only to research it more and maybe you will find hidden potential you did not originally see.
Thanks for reading, and if you enjoyed an upvote would be appreciated. Feel free to disagree with me in the comments, who knows maybe we can have another enjoyable debate.
Check out my YouTube Channel - https://www.youtube.com/channel/UCBLftV9ZsgTxoMZWPfIUKGw
Article concerning the illicit use of Bitcoin - https://cryptovest.com/news/less-than-1-of-bitcoins-activity-is-criminal-new-study-shows/