For many, cryptocurrency is still an abstract concept. It has not yet reached the tipping point in its move toward entering the mainstream.
Are you familiar with the concepts and vocabulary of cryptocurrency? Check out the video below for a brief introduction.
Quick Intro for Cryptocurrency Newbies
The popularity of the digital money ecosystem — for citizens as well as business interests — are rising. Here are three major trends to look out for in the upcoming months.
Increased Decentralised Exchanges
99% of cryptocurrency transactions still run through centralised exchanges which negates its purpose. The unique selling point of cryptocurrencies is decentralisation through blockchain technology which provides both security and anonymity. There are numerous advantages of decentralised exchanges as outlined below.
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Although decentralised exchanges are not broadly used at present by members of the cryptocurrency community (because of poor user experience and user interface), experts expect a transition soon. The rising popularity of cryptocurrencies among the mainstream will increase the demand for decentralised exchanges. Emerging exchange networks such as Switcheo, the first global multi-chain exchange, make interoperability between different blockchains possible. Additionally, Chinese cryptocurrency exchange Huobi announced that it would invest $100 million in building its own decentralised exchange. Once the obstacle of usability is overcome, decentralised exchanges will further foster the security of using cryptocurrencies.
Cryptocurrencies Will Become More Widely Used
According to Forbes, the rapid adaption of cross-sector companies in using blockchain technology for their businesses will contribute to making cryptocurrencies more mainstream. While Goldman Sachs plans to launch its own futures Bitcoin trading, IBM is investing to develop the potential of blockchain technology for applications outside the cryptocurrency network. Young people in particular believe in the potential the virtual money system holds: a study by YouGov revealed that 44% of Millennials in the US think cryptocurrencies will be “somewhat” or “very” widely accepted within the next 10 years.
Bitcoin’s Dominance Will Prevail
Forbes predicts the price for bitcoin, the most used cryptocurrency, will rise over 30% by the end of the year, reaching $8,500. Journalist John Stevens agrees that bitcoin will become more dominant, and for the following reasons:
- Despite its volatility, bitcoin is still far less volatile than other popular cryptocurrencies like Ethereum and Ripple.
- The scalability issue (transactions take days to complete as more and more people use the Bitcoin network) is being solved by projects like the LightningNetwork
- Advantages over other cryptocurrencies include: payment freedom, choice of own fees, fewer risks for merchants, transparency, security and control.
Sean Kiernan, chief executive of DAG Global, sees the UK at the forefront of cryptocurrency. “The UK is a major global financial hub and in recent years has become a fintech leader as well. At the same time, it is starting to demonstrate significant potential to become a leader in blockchain technologies and the crypto economy,” he said. “The gap between the two worlds of traditional finance and crypto economy remains, but in the coming years we can expect this to lessen and eventually disappear.”
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