Cryptocurrencies will become more accepted
However, many retailers may start accepting payments in cash-like digital currencies such as Bitcoin (CRYPTO:BTC), Litecoin (CRYPTO:LTC) or a memcoin known as Dogecoin (CRYPTO:DOGE). The increased use of cryptocurrencies should prompt regulators and politicians to act faster, and blockchain systems should also benefit from widespread adoption.
While the number of merchants accepting cryptocurrencies has steadily increased, they are still in the minority. For cryptocurrencies to become more popular, they must first gain widespread consumer acceptance. However, their relative sophistication compared to traditional currencies may be prohibitive for most except the tech-savvy.
Cryptocurrencies will become more decentralized
The decentralized nature of cryptocurrencies is equally important. It provides an alternative way to store, transfer and manage wealth for the traditional financial system. Cryptocurrencies can prevent illegal seizures by governments and can mitigate political risks that could lead to systemic financial disaster.
Bitcoin is a decentralized currency that uses peer-to-peer technology that allows all functions such as currency issuance, transaction processing, and verification to be performed together over a network. While this decentralization protects Bitcoin from government manipulation or interference, the downside is that there is no central authority to make sure things run smoothly or to support Bitcoin’s value. Bitcoins are created digitally through a process of “mining” that requires powerful computers to solve complex algorithms and crack numbers. They are currently created at a rate of 25 bitcoins per 10 minutes, capped at 21 million, and are expected to reach that level in 2140.
Cryptocurrencies will become more valuable
Cryptocurrencies continue to receive more attention as an investment opportunity due to notable breakouts in 2017 and 2020. The trend towards financial decentralization and the digitization of money provides room for growth in cryptocurrencies. Investors are also holding cryptocurrencies as a store of value against the backdrop of low post-COVID interest rates with inflation expectations.
Some economic analysts predict that a major shift in cryptocurrencies is coming when institutional money hits the market. Additionally, cryptocurrencies have the potential to be traded on Nasdaq, which will further enhance the credibility of blockchain and its use as an alternative to traditional currencies. Some predict that all cryptocurrency demand is a proven exchange-traded fund (ETF). ETFs will certainly make it easier for people to invest in Bitcoin, but there is still a need to invest in cryptocurrencies that may not be automatically generated by the fund.