What is Cryptocurrency?

Did you know that the global Crypto Market Cap has boomed upward to $1.46T in 2021? And also, you may have heard of multiple types of cryptocurrencies that are trending in all social media platforms and thousands of individuals are overwhelmed due to the buzzing figures appearing on multiple posts regarding speculations and the shift towards the new digitalized era.

Cryptocurrency is highly popular in the contemporary era as it can fix major problems of traditional currencies by implementing the power and responsibility in the currency holder’s account. This digitalized currency fulfils the five properties and three essential functions of money. Cryptocurrency is considered to be a more secure medium of exchange.

Cryptocurrency is considered a digital form of money and a medium of exchange created and stored electronically using encryption techniques to control and maintain the creation of monetary units and to verify the transfer of funds. Cryptocurrency has no intrinsic value as it is not redeemable for another commodity, such as gold. It has no physical form and only exists in a specific network.

The supply of cryptocurrency is not determined by a central and the network is completely and entirely decentralized to boost transparency, cost reduction, accurate tracking, and permanent ledger.

Cryptocurrency transactions are considered to be secured and more protected as the transaction is unhackable, public, irreversible, and it is controlled by people. The blockchain technology behind cryptocurrency is overhyped due to its promising elements. Five major trends will take place in the crypto world in 2021;

Tax Regulation

The main speculated topic soon is the tax regulation and analysis of cryptocurrencies. Crypto taxes are not yet unknown, though it appears to gain traction in some countries. The introduction of mandatory user identification and verification procedures, the development of protocols that permits tracking transactions are clearly indicating changes in the cryptocurrency market. Increasingly, different governments are exchanging information on the owners of cryptocurrencies to predict their earnings.

Crypto Harbors

The introduction of crypto taxes will lead to offshore crypto havens due to the attractiveness of jurisdictions that will restrict practice as users will aim to legally minimize the costs of owning digital assets. These offshore crypto havens will be played by countries such as Switzerland, Korea, Japan due to their exquisite financial markets and technological specialization.

Crypto Crisis

The crypto market is speculated to mature as it is not only more transparent, regulated, and more protected, it is commencing to be highly subjected to a range of economic challenges and negative impacts. The number of cybercrimes and frauds and increasing leading financial institutions and governments to take charge. The first cryptocurrency Bitcoin has faced a major fallback in May 2021 leading to steering the crypto market. According to Coin Market Cap, there are around 10,333 cryptos, 384 exchanges, $1,466,087,092,659 Market Cap available in June 2021.

Cost of Transaction

This trend is considered to be multidirectional as the transactions will become much cheaper due to radical technological advancement. The changes in operations can create a major impact on the interest of cryptocurrencies by the major individuals in the e-commerce industry. Online corporate companies are highly interested in investing in the crypto market as it is much cheaper to deal with digital currencies than fiat currencies. Therefore, increasingly there is speculation in the long term that the speed of the cryptocurrency speed will boom upward as a means of payment.

The reality of 5G to become transformative

The invention of the 5G standard has created a new paradigm in data transmission which is commonly underestimated by many speculators. The implementation of 5G will lead to the birth of new concepts and types of services. The invention of 5G will affect how corporate companies and crypto platforms will change the mining processes and tools. 5G is considered to change the transaction management capabilities that will no longer be finite to network data speeds. Traders are increasingly struggling to implement their servers as close to the crypto exchange platforms. Traditional finance institutions and crypto platform companies are closely collaborating to benefit from the array of cryptocurrencies with advanced technology.

It is speculated cryptocurrencies may go up in value in the long run, but many investors and financial analyst consider it as an investment generation with no cash flow. While the others see it as the currency of the future that needs great stability. Therefore, the crypto market is incredibly volatile and considered to be a speculative buy.

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Aysha Arshad is a passionate individual with an aptitude for social entrepreneurship, content writing, and article writing.


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