Following its introduction in the previous decade, cryptocurrency has received a large amount of exposure and media attention. Despite the attention and conversation around this notion, it continues to be one that causes public misunderstanding, since there is still doubt about what cryptocurrency particularly what bitcoin is in reality and what the final future of the cryptocurrency phenomenon will be.
Related: 10 Important Cryptocurrencies Other Than Bitcoin
Introduction
There is still debate about whether Bitcoin is a speculative commodity, money, something in between, or something totally else. Because cryptocurrency was just invented a decade ago, it is logical that there is still a vacuum in information about what it should be described as, why it is important to society, and what function it will eventually play in society.
Despite the fact that the popularized term for it includes the word “currency,” cryptocurrency is not officially recognized as a legal currency in the vast majority of the world, and while it was originally designed to function as a peer-to-peer payment mechanism (Nakamoto, 2008), it is clear that in recent years, cryptocurrency has largely emerged as a speculative asset and has thus been regarded more as an investment opportunity for individuals.
As a result, bitcoin has seen considerable volatility, giving rise to the widely held belief that cryptocurrency is only a speculative asset prone to bubble-like characteristics. Once a result, as the early publicity around the issue wears off, it may gradually lose its original attractiveness.
Despite the volatility seen in the movement of cryptocurrencies in the past. years, there are certain technological benefits inherent within cryptocurrency, which have led to some indications that the virtual currency may someday be embraced on a larger scale as a payment tool for more efficient transactions. Many bitcoin fans are now optimistic that these instinctive technological advantages will ultimately surface, paving the door for cryptocurrency to evolve into a genuinely global currency.
We found a survey that 80% of people think Bitcoin will one day become a mainstream form of payment.
As a result, the purpose of this study is to investigate if cryptocurrency has the ability to develop as a kind of global currency through performing monetary tasks. To that end, this research examines the cryptocurrency phenomenon from a variety of perspectives, ranging from the technology behind cryptocurrency to developments in fiat money and global financial issues, examining the volatility and drivers behind the value of cryptocurrency, the regulatory framework toward cryptocurrency, and finally examining the public attitude toward cryptocurrency adoption, as well as speculating on current trends that may push forward toward cryptocurrency adoption.
The research issue is somewhat speculative, as answering the complicated future-oriented question with a high degree of assurance is challenging. As a result, the goal of this study strategy is to address some information gaps and generate a more thorough understanding of the cryptocurrency phenomenon as it now exists. Furthermore, have a better understanding of where it may end up in the framework of monetary history.
A brief history of cryptocurrency
Cryptocurrency is a digital asset that employs cryptography to encrypt and authenticate transactions while also regulating the number of units in circulation. Cryptocurrency is unusual in that it is the first sort of “currency” to use a sophisticated type of cryptography known as the “blockchain.”
Using a proof-of-work method, the blockchain serves as the primary way of confirming transactions and maintaining the currency’s legality. When it was initially invented, bitcoin was one of the first decentralized digital currencies, and it is still widely used today. While the word cryptocurrency is a common way to refer to cryptographically backed digital currency, there is no general agreement on the term at the moment.
As a result, there are a number of interchangeable phrases that are commonly used to refer to the same notion, such as “digital currency,” “virtual currency,” and “crypto tokens.” Prior to the establishment of cryptocurrencies, digital currency systems existed, including cryptographic digital money dubbed “E-cash” invented by a cryptographer in 1983.
Only in the year 2008 did the first fully defined cryptocurrency, known as “Bitcoin,” first come on the market. This cryptocurrency was first released by a developer who is only known by the pseudonym “Satoshi Nakamoto” to this day. With the goal of developing a peer-to-peer digital currency system that operates independently of centralized regulation or authority.
As a result, a currency was designed to be the sole property of its possessor. Shortly after its creation, the new digital currency “bitcoin” was valued at less than a penny when compared to the US dollar. However, Bitcoin’s value skyrocketed the next year, hitting a high of 27 US dollars at the end of 2009.
In the early 2010s, bitcoin 5 began to gain traction, and in 2014, Microsoft became one of the first major corporations to announce that it would begin accepting bitcoin payment transactions. Bitcoin hit its peak value of 19,783.21 US dollars at the end of 2017. The quick growth of bitcoin sparked a lot of speculation and curiosity in the cryptocurrency space.
Methodology
This academic paper’s study has mostly centered on the use of secondary sources, evaluating information from existing literature on this topic from multiple sources in an attempt to get holistic insight and comprehension of this complicated issue.
The research evaluated the findings of many studies, reports produced by institutions, and accessible data, as well as benefiting from expert assessment of the literature and seeking information from news items to add to the body of knowledge.
The study involves both qualitative and quantitative data in order to acquire a broader viewpoint from which to further evaluate, and the types of literature reviewed include legal, academic, and sociological perspectives.
This paper’s structure is based on a review of studies, data, and other publications, as well as the author’s own personal analysis and interpretation of the study material. The topic is introduced first, and near the end of the study, a summarized analysis of the information presented in the body is performed before reaching the conclusion.
The format of this research paper is theoretical in nature, requiring some degree of speculation and interpretation. The goal is to present the evidence and analysis in an unbiased manner, reaching a conclusion by utilizing current data, expert opinions, and continuous analyses based on the sources currently available.
Related: Is It Worth Using Cryptocurrencies When Gambling Online
Frequently Asked Questions
Can cryptocurrency fulfill the function of money?
While all cryptocurrencies can theoretically and practically serve as a medium of exchange, they are unlikely to become widely used and liquid mediums of exchange until they demonstrate utility in one of the money’s other functions.
Do cryptocurrencies Fulfil any of the three purposes of money discuss?
All cryptocurrencies have the potential to function as a means of exchange, both theoretically and practically.
Does Bitcoin provide all the functions of money?
Although Bitcoin is neither a currency nor electronic cash, it performs the functions of money as described by both (Mishkin, 2004) and the European Central Bank: Money is a means of exchange.
Can money be made with cryptocurrency?
Yes, you can make money with cryptocurrency.
Can we consider cryptocurrency as money?
Cryptocurrencies are not cash.
Why is cryptocurrency considered money?
The term “money” is used in definitions that determine the scope of a few statutes..
What does Bitcoin actually solve?
Provide an alternative payment system that operates without central supervision but is otherwise utilized in the same way as traditional currencies.
Does Bitcoin satisfy the unit of account?
Bitcoin, by definition, is intended to be a unit of account.
How does Bitcoin make money for itself?
By successfully validating blocks and being rewarded.
What are the 3 purposes of money?
Store of value, unit of account, and medium of exchange.
What are the three aspects of cryptocurrency?
- Cryptocurrencies.
- Crypto commodities
- Crypto tokens.
What are 3 cryptocurrencies?
- Bitcoin (BTC).
- Ethereum (ETH).
- Tether (USDT).
- BNB (BNB).
Summary
The theoretical hypothesis of bitcoin coming to fulfill the functions of money and the inclusion of cryptocurrency as a global currency in the international economy was researched in this article.
This has been investigated in a variety of directions by a range of people in trying to understand the phenomenon of cryptocurrencies and their acceptability by society at large. The nature of this issue has shown to be rather complicated, with a number of elements that will need to be investigated at a later period in order to comprehend where this will go in the future.
