Even after the fading hype, Bitcoin has enough potential to revive the financial structure. Future money is more open than one might think.
Every transaction taking place in the network of bitcoins must be confirmed by participating users and, therefore, consumes a lot of energy. Whenever this happens, new bitcoins are generated as a reward for this mechanism. After every new bitcoin transaction, it becomes increasingly difficult to build more in the system. So, the current circulation is more than 17 million in the market, and this simplifies the logic of increasing prices as the supply is limited, and the prices are increasing.
But recent trends show that the value of Bitcoin has fallen from $13,870 in Dec’2017 to $6,483 in March’2020. This shows that the bitcoin bubble has burst, and playing in the market would be a bad idea. Several economists and financial analysts claim that bitcoin’s fashion will fade away with time, and the value curves will start touching the bottom line. But the detractors of this system still predict that it will rise to over a million dollars someday in the recent future. The study should be examined from both perspectives.
Cryptocurrencies can never take over or replace the traditional banking system because the technology is very nascent and not trusted by the masses. There is no alternative to the reserve-backed currency system that could be found through this virtual and Autobot technology of currency at any stage. All these arguments are quite justifiable and explanatory through the statement itself.
But the future of bitcoin can neither be minimized nor can be overlooked. Its developers and networkers are so engrossed in its innovation that there is no going back even after a significant fall in prices. It can be seen that the banking world has hardly grown in the past years when compared with the crypto growth rates. But it is also true that there is no way that cryptocurrencies can shake up the entire banking and trading systems.
The revolution in the banking systems of the country has already started gathering air. The reason for this would be the benefits this system is capable of offering.
- Potential payments, especially cross-border, are seen between many countries with their own cryptocurrencies because they are faster as well as cheaper.
- Stock exchange and share trading are garnering major attention of cryptocurrencies because they decrease the intermediate transactions and costs, leading to smooth and non-redundant trading practices.
- Digital identity verification steps are sorted with the technology because you can select who you want to share your identity, and don’t need to repeat it for a new entity.
- Accounting, bookkeeping, and audits will benefit from standardization and auto-detection of important data for financial statements through electronically maintained files.
- Trade-finance can be streamlined by getting rid of time-consuming paper works and bureaucracy. By updating it on a real-time basis for all network members.
These benefits, combined with hundreds of others, attract a large population spread over the globe. However, blockchain technology has not been seen as a wholesale change in the initial stages and is filling only several niches for the central banks and other financial institutions. But the potential of bitcoin is way more than it is realized and will be exploited in the coming future to the best.
It can thus be concluded that even though many blockchain startups are failing and the value of cryptocurrencies are on the fall, the economies and finances are trying to lead blockchain applications. National cryptocurrencies are appearing, and blockchain is intervening in government agencies. As it is in high demand, the domain meets the internet of things and has great potential to revolutionize the banking system and economies for everyone’s benefits.