Cryptocurrencies – fad or the future of money

Cryptocurrencies - fad or the future of money

About Cryptocurrency

Cryptocurrency has become increasingly popular in the financial world in recent years. Being popular, it has also taken up a lot of space in the media. Several individuals believe cryptocurrency is becoming a fad, while others believe it is the world’s future. Cryptocurrencies have been an exciting topic that has piqued the media`s interest.
Cryptocurrency, also known as a decentralised currency, mainly refers to a digital asset utilised as a medium of exchange to conduct transactions similarly by which actual cash is utilised, yet a catch exists. Cryptocurrencies utilise blockchain technology to start the transaction process and keep the coins in the database. This can be achieved by using a global ledger that is spread across the world. After the completion of a transaction, it is verified against the written documents of the world with the help of an advanced encryption technology known as cryptography. As a consequence, individuals become confident about the transaction as it is entirely safe, and it is theoretically impossible to make any changes in it as changes have to be made across the overall distributed ledger. Various types of cryptocurrencies, such as Litecoin, Dogecoin, Bitcoin, and Ethereum, are accessible in work where Bitcoin is considered popular. A total number of 21 million bitcoins set globally are made available for the process of mining, and if it is investigated, almost 25 bitcoins will be produced every 10 minutes with the process of mining and with the help of powerful computers. A limit of 21 million bitcoins is set to be attained by the year 2140.

Role of Cryptocurrency

In the last few years, cryptocurrencies have been portrayed as a trending topic in the finance sector. It is considered an online, digital, and virtual currency that uses encryption to safeguard its value. It has accompanied the banking sector in both positive and negative shifts. Despite cryptocurrency being a challenging and complex concept to understand clearly, it is very easy to use. Initially, it is difficult as it differs entirely from the currencies used for millions of years. After the global financial crisis in 2008, bitcoin was invented to operate independently and not with financial institutions, central banks, and governments.
Since then, bitcoin design has become a consternation source for regulators who tried to discover various methods to handle and manage it. With this, several countries declared it an illegal currency or outright outlaw; meanwhile, other nations have asked to stay alert and made strict means to regulate and tax it.

Working Of Cryptocurrency

Blockchain technology helps cryptocurrency to work and function efficiently. Blockchain technology is the distributed ledger, which aids by recording all the earlier Bitcoin transactions. Cryptographic validation is utilised to tie up all the blocks or units of data together. These digital tokens are generalised through the process of mining, and the movement of coins or tickets among users is observed and monitored and is also verified over the entire network of the generation.

Miners are either organisations or persons who have the capability of conducting the mining process with the help of utilising powerful computer systems. It is the procedure of corroborating and increasing transactions to the blockchain or the public ledger and revealing novel coins. The mining process requires grouping transactions into blocks and resolves the challenging computational complexities. Successful miners are the ones who are rewarded with increasing the number of following blocks in the blockchain. This helps in achieving double advantages, and the miners are awarded for the successful completion of their work with novel manufactured coins or tokens, and the fees are paid by those users who are making transactions.

Rise of Cryptocurrency

Cryptocurrencies have basic decentralisation features, and they have accumulated various momentums worldwide since their launch. Many individuals like Elon Musk regarded cryptocurrency, particularly bitcoin, as an asset for investment grade, and this convergence of cash led to an enhanced rise in the value of bitcoin, which crossed over the mark of $50,000. Moreover, several big corporations such as Starbucks, Microsoft, and Tesla have started to accept bitcoins as payment. As the cryptocurrency industry is getting popular and growing rapidly, several other organisations, such as Facebook, Amazon, and Microsoft, are preparing to launch cryptocurrencies in their organisations.


Cryptocurrencies are considered unpredictable, and most times, the price of these currencies swings extremely wild, making them unsuitable to utilise as a standard authorised currency. Several investors also gave their opinions in favour of this and are highly influenced by this; for instance, whenever Elon Musk makes any statement regarding bitcoins and cryptocurrencies, the value and prices of these coins start fluctuating dramatically. Several of these cryptocurrencies are assumed to be utilised to show appreciation and have their prices touching the sky without having any logical reason. An ideal instance of this currency is Dogecoin, which is mainly created for fun. It represents a dog in its currency and greatly increases the coin’s value. The enhanced value may be attributed to craziness among the investors who do not want to lose money when the prices rise.

The Purpose and manifestation

The purpose of the cryptocurrency was mainly to create a stable, decentralised currency uninfluenced by price manipulation. Depending on the latest trends in this area, it can be easily understood that governmental organisations are highly volatile and do not authorise money through their policies. The historical volatility data for some cryptocurrencies are shown for the last few years.

  • Litecoin – 94.47%
  • Ethereum – 91.08%
  • Bitcoin – 76.49%

These forms of cryptocurrencies are used sparingly for making daily transactions. The central bank issues money more simply to enhance the liquidity of the market, but when there is a case of cryptocurrency, they fix several coins as these coins are complex to change the liquidity of the market. There are several examples when the anonymous features of cryptocurrencies are utilised for operating several illegal works. The wrongdoers behind these latest payment attacks in various countries ask to make payments to them in bitcoins as these currencies are not traceable, which makes the authorities doubt and unsure about it. As it has the structure of a distributed ledger, the transactions of these currencies have a higher environmental cost than normal digital transactions. Finance Assignment have been focussing on crypto currency as well.

Advantages of Cryptocurrencies

  • As cryptocurrencies are decentralised currencies, they are not managed by any country’s central authorities or government. These are also unaffected by the effects of inflation because it has a decentralised structure.
  • Transactions made in the form of cryptocurrencies are entirely unidentified, unlike transactions made in banks or financial institutions. Only the cryptocurrency address to which the crypto payment was made and delivered will be known. Yet, it is impossible to identify the individual who belongs to the crypto address. These unidentified characteristics help in preventing its users from identity theft and fraud.
  • Cryptocurrencies are widely accepted as a payment mechanism because they have received a striking surge in global popularity.
  • The charge for making transactions in cryptocurrencies is very cheap compared to other digital transactions like credit cards and much more.
  • Generating cryptocurrencies is very complex, making it impossible for others to copy them or produce fake money.

Disadvantages of Cryptocurrency

  • Cryptocurrencies are considered highly buoyant currencies because of the fluctuating price swings within a short period, and this raises doubt regarding the currency’s viability and makes investors unsure about using it in the future.
  • Individuals who need help understanding the concept of cryptocurrencies or need to be made aware of the process of working believe that the investments made in cryptocurrencies are riskier as the governments of different nations have different viewpoints on whether to consider it legal cash.
  • The anonymity of transactions made in cryptocurrencies also captivates them for doing criminal activities and unlawful activities like weapon acquisition, gambling, tax evasion, and much more.
  • The transactions made in cryptocurrencies are intrinsically irretrievable. Transactions sent to an incorrect address cannot be tracked, losing the transferred amount.
  • If the storage device used to store the cryptocurrency is lost or destroyed, there is no chance of returning the bitcoins.

The Future Of Cryptocurrency

There are several latest restrictions made on cryptocurrencies, like the digital wealth may be blotted out by the crash of a computer, or it may be possible that hackers rob the virtual vault, which may be inscribed in the future because of the developments of technical advancements. The most complex thing to resolve is the paradox that afflicts cryptocurrencies, as the higher their popularity, the more governmental scrutiny and regulations they have to deal with, destroying the assumptions of their existence.
Even though the total number of businesses has started accepting payments in cryptocurrencies, which have been continuously rising, they are in smaller numbers. Cryptocurrencies need to earn the consumers’ approval to be utilised extensively. Cryptocurrencies have become technologically savvy, which is a good feature of this currency, yet it consists of many complexities in comparison to traditional currencies, and this is one of the reasons why most customers repel it. A cryptocurrency must meet the requirements if it has to join the mainstream financial sector. Firstly, it has to be complex in mathematical terms so that it would not be easy for hackers to attack and thus prevent individuals from fraud. At the same time, it must be simple for people to understand. Secondly, it has to become decentralised but with appropriate protection and prevention and thirdly, maintain the user’s anonymity without conducting as a channel for money laundering, tax evasion or various other activities of criminals.
Different countries have different views on cryptocurrencies; some countries say that Bitcoins are considered official currency, while others say that the transactions made from cryptocurrencies are illegal. The regulations of cryptocurrencies are moving forward towards the federal level.

The administration of Joe Biden has formed highly qualified members of the team to guide the regulation process of cryptocurrencies led by the Securities and Exchange Commission of the United States. Individuals who acquire high knowledge and understanding of these currencies can set the tone for their utilisation in the future with the hope that this system will be a workable system for traditional banks, cryptocurrency businesses, consumers and investors. Informed investors and regulators have a better understanding of important and meaningful issues like the distinction between the storage system of the value like Bitcoin and the complex ledger having smart contracts like Ethereum. Several parties introduced some regulations and bills for cryptocurrency in 2022, but the bureaucracy wheels moved at a slow speed, and this problem needs to be addressed using deep thought and analysis. Most governmental organisations adopt a legal framework and work according to the framework and the taxation system; cryptocurrencies are finding their way out and entering into the digitised wallets of consumers in the US on a wider scope. However, as Bitcoins have already become legal tender, the US government is still waiting to follow it shortly.
Still, many retailers started accepting payments in digital currencies like Bitcoin, the replica of Bitcoin called Dogecoin, and Litecoin and are embracing cryptocurrencies. Enhanced usage of cryptocurrencies is stimulating politicians and regulatory authorities to take action faster; meanwhile, blockchain technology will also help benefit from the wide usage of cryptocurrencies. The cryptocurrency market will filter this procedure in the coming years. And, as investors cannot work unpredictably, it is important to work with a strict regulatory framework that improves these currencies’ ruinous position from today`s viewpoint.

Why cryptocurrencies are not considered the future of money?

The bright future of cryptocurrencies can be delayed in many ways. These are –

  • Policymakers get involved in making policies and drag their feet when they fail to make a sensible and better regulatory framework for cryptocurrencies in the next few years.
  • They also decide that cryptocurrencies such as Bitcoins and Litecoins only aid in serving illegal activities and are considered bad actors.
  • It is also possible that the retailers will refuse the inconsistent value of these currencies and hold on to the usage of transactions made through credit cards and traditional cash instead of cryptocurrencies.
  • A sudden recklessness in violating security, failing technological platforms, and several other complexities and warnings about the certainty of payment systems based on blockchain technology help undermine the public’s trust in cryptocurrencies.

If decentralised currencies or cryptocurrencies exist under these situations, the digital currencies’ revolution and transformation can be delayed for many years. And, if it is assumed that it is arriving, its look may differ from the sea change led by Bitcoin. However, in the long run, any country or a group of countries are planning to stop the idea of cryptocurrencies entirely yet slow down its movement and navigate towards the final products in different areas. These risks may seem vague or speculative, but these are actual issues. At last, the community of these currencies work with the regulators, and if they fail, it will block the road of the progress of the sector of digital currencies. This is why investors and individuals should not bet on Bitcoin and other forms of cryptocurrencies because the market of these currencies rises in the first year and crashes in the next year. The markets of these currencies move in very unpredictable and mysterious ways. Additionally, investors with a better understanding are working on developing a diversified portfolio in the long run with the ability to stand in a dramatic mishap in any specific industry.


In conclusion, cryptocurrencies are working and destined for revolution and transformation in the payment world. The rapid incorporation of cryptocurrencies into our economy and the country’s financial system reinforces this vision. These are mainly primed to bring an important change in the ecosystem of payments worldwide. The adoption and sustained growth explain that these currencies are broader than a trend and symbolise a revolutionary change in the financial sector by remarking their critical role in restructuring the future of money.

Author Bio: Mark Edmonds, a regarded academic author at Academic Assignments, spends significant time in conveying great assignment writing services to students. With a strong fascination with arising financial technologies, Mark investigates the developing scene of digital currencies and their true capacity as the future of cash. Drawing from his expertise and commitment, he gives clever points of view that help students accept complex ideas. As a fundamental resource for Academic Assignments, Mark Edmonds is focused on enabling students and adding to their academic success.