In future, Cryptocurrency will be the main currency across the world. One thing that the 2008 economic crisis has showed us is that the traditional currency systems are flawed. It has been confirmed in 2020. More and more people are searching for viable alternatives. That is what the crypto offers. It can offer purely secure decentralized form of banking. Deutsche bank has said that by 2030 more than 200 million people would be using digital money. Traditional money would be on the way out. Twitter CEO Jack Dorsey has said he believes Bitcoin will become the world’s single currency. Elon mask has said that Crypto is a far better way to transfer value than a piece of paper. China state TV has called blockchain, a technology that facilities Crypto ten times more valuable than the internet.
You need to get familiarized with the technology. It’s the biggest technological invention since the internet. If you do not get familiarized, you will be left behind. Just like in the 90s when the internet was taking off, there were people who were resisting adopting it. There will be such people with blockchain and Crypto as well. As we rely on internet for information and communication soon it is going to be the same for financial transaction using block chain. If you are still not familiar with this technology then now is the time for it. You will position yourself better for opportunities in this space. A lot big opportunities will come with investing in Crypto. If we just have a look at Bitcoin. If one had invested 100 dollars in Bitcoin about 5 years ago, by now it would be worth about 2500 dollars. The price of Bitcoin is all set to keep going up. Other Cryptocurrency like Ethereum, Litecoin, Dash, Ripple etc have huge potential to grow and bring great returns for investors. But to know which coin to invest in you need to get educated and have some experience. Now is the time to become crypto savvy and spot the opportunities.
It’s a solid alternative for saving your money. Crypto has a long term upward trend. If you had 100 dollars in cash and you kept it in your home. After 10 years, these 100 dollars would have low purchasing power because of inflation. This does not happen with Crypto. It is more volatile than other currencies because it’s still new and gaining attraction. Like in the starting of 2018, when the price of Bitcoin tanked, but it had almost recovered now since then and its upward trend is likely to continue. That is what makes it an alternative investment option that will beat all other returns.
You are safe from inflation in case of Crypto. The problem with traditional money is that it’s always going down in value. This is not by an accident; government and Central bank control it with purpose, especially when there is a financial crisis. Infact, 22% of all dollars which exist today have been printed in 2020 when the Federal Reserve injected two trillion dollars in the economy. With more money in the economy, the value of money goes down. That is what we call inflation. Smart people trust gold more than money. Crypto live gold do not get created within short period. It means Crypto also holds value and is inflation free.
It’s very easy to get into Crypto then you thought. You do not need a PhD in programming or MBA in finance to invest in Crypto. . But it’s important to have basic knowledge of crypto and how it works. A smart phone with internet access is enough. Crypto is much easier to get into in comparison to other traditional investments. It has got high liquidity because you can buy and sell easily and quickly. There is not a high threshold to get into it. For any kind of investment you make, fees will be charged. Fees for buying, selling, maintenance etc. This is equally true of crypto. But the difference with crypto is that the fees are determined by users. It’s in their interest to keep them low. It’s another reason that the adoption of crypto is moving up.
Regular money is controlled by government and banks. The beauty of crypto is that it is controlled by nobody and everybody at the same time. Let’s take the example of Bitcoin. The code is stored on thousands of nodes. It means there are thousands of people who voluntarily run Bitcoin software on their nodes. There is no Central authority or mastermind behind it. All users effectively retain control. It is in everyone’s interest to keep the network active and healthy. Blockchain is functioning nonstop. Bitcoin transactions take between fifteen minutes to an hour. It has got the best security out there and that’s down to where the information is stored. Anytime a transaction takes place and digital money gets hammered over to a new user that gets recorded permanently and it can’t be erased, even after it has changed hands. As the data is stored on tens of thousands of users. It’s difficult to manipulate the data.
Blockchain is here to stay. Bitcoin and other crypto are built on blockchain. There’s more to blockchain than crypto. Blockchain is being used for many other things. Big companies like Walmart, Pfizer, Siemens, Unilever etc. are using it to record data which are too complex for spreadsheet. Healthcare companies use it to store their patient’s data safely. It’s being used to keep the record of property ownership. Big businesses like Microsoft, AT&T, McDonalds, KFC, Subway etc. have started accepting payment in Bitcoin. Even Wikipedia accepts donations in Bitcoin. In the future, this is the way how transactions are going to take place. One day people would talk about how they used to buy the things in Dollars, Euros, Pounds, Yen, Rupees etc., the same way we talk how people used to barter things in ancient times. It’s time to become part of history by adopting crypto in its early stages. The biggest transfer of wealth is happening right now through technology.
It will give high returns if done at the right time. We have already seen that how much Bitcoin price has increased and the long term trend also looks upward. Many Crypto have seen big gains in 2020 despite the pandemic. Ethereum, Ripple and other crypto have given good returns as well. It’s in limited supply and can’t suffer from inflation. Normal currencies lose their value because of inflation. Crypto doesn’t lose value because their supply is capped. This is written in their source code. As their supply is limited, they do not suffer from inflation. The price of Crypto is determined by the markets, no government can touch it. Government can control the value of traditional currency like printing money. They cannot freeze the crypto accounts. It’s at an early stage and already disrupting markets. Although it’s over a decade since the Cryptocurrency started, it’s still like what internet was in 1990s. Adoption rate is going to increase day by day. Just like internet disrupted many things, in the same way, blockchain going to disrupt many things in the coming decade and Cryptocurrency is going to disrupt the currency market.
Navin Kumar Singh
Chie Manager (Faculty),
State Bank Institute of Learning & Development, Bhavnagar.
