Table of contents:
- 1 Which crypto currency has a future? – The crypto currency with future explained in detail!
- 1.1 What will the crypto future look like?
- 1.2 Best crypto currency? Digital currencies suitable for everyday use have a future
- 1.3 PRICE FLUCTUATIONS AND INTEROPERABILITY AS MAJOR CHALLENGES
- 1.4 Crypto currency: Future has, which offers increase in value
- 1.5 SMART CONTRACTS AS THE BASIS OF A CRYPTO CURRENCY OF THE FUTURE
- 1.6 Further application possibilities for crypto currency of the future
- 1.7 Market dominance as a criterion for the lifespan of a crypto currency
- 1.8 Standalone or Cooperation
- 1.9 The cross with the stability
- 1.10 Crypto currency: future of money, money of the future
- 1.11 Invest and trade with the crypto currency of the future
Which crypto currency has a future? – The crypto currency with future explained in detail!
Crypto currencies are current, no question. Since Bitcoin has made steep gains in 2016-2017, digital currencies, at least the better known among them, are becoming increasingly popular with investors. Since Bitcoin entered the financial world in 2009, about 2,500 old coins and tokens of various kinds have been added. Some of them are based on the Bitcoin block chain or are even forks of the BTC, such as Bitcoin Cash or, more recently, Bitcoin SV, while others go their own ways. Ethereum with its Smart Contracts or Ripple could be mentioned here. For investors and Trader the question arises in view of the large selection “which crypto currency has future?
- More than 2,500 crypto currencies and tokens
- Different software architectures
- Various fields of application
- Possibly strong price fluctuations
What will the crypto future look like?
Digital currencies are newcomers in the financial industry, compared to other products that have been around for decades or centuries. Nevertheless, Bitcoin & Co. has managed to shake up the markets considerably. The BTC, created as a decentralized, tamper-proof P2P payment solution, which initially received little attention, grew considerably from 2016 onwards. Virtually all better-known crypto currencies benefited from the price gains. This aroused interest in the digital dollar. From play money for nerds, crypto-coins now became a serious phenomenon that was taken seriously and demonstrated its practical suitability.
Starting with the acceptance of Bitcoin payments in webshops via Bitcoin machines or the possibility of paying utility bills with Bitcoin (in Austria), crypto-currencies began to make their way into everyday life, although not without problems. Due to the small block size of only 1 MB, Bitcoin itself is comparatively slow in processing transactions, even though it was improved via Segregated Witness Updates, or SegWit for short. No problem for the loyal fans of the first hour – they approve of the future of the world’s first crypto currency and regard the BTC primarily as an investment, as “digital gold”.
Best crypto currency? Digital currencies suitable for everyday use have a future
Already before the Bitcoin Hype had begun however the race around the development of a crypto currency of the future. In view of rising user numbers and transactions one wishes oneself nevertheless real time payment executions, which can keep up for example with credit card offerers. The scalability, the growing along of a block chain or its coin, is one of the important topics regarding the well-known crypto currencies and their faster, younger clones.
With crypto-currencies, which are “dug”, thus generated by computing power and brought into circulation, a crypto-currency with future must be able to be pleased also the question, how fast and how many new blocks are created, when the final number of Coins is emitted, and whether an “inflation” would be conceivable.
PRICE FLUCTUATIONS AND INTEROPERABILITY AS MAJOR CHALLENGES
Another critical issue is the volatility of crypto currency rates. As a means of payment suitable for everyday use, digital currencies have a hard time, among other things, because the pricing of goods and services requires additional effort on the part of the “Kryptos” merchants.
But interoperability also plays an important role when it comes to the question “Which crypto currency has a future? The system of digital means of payment must be able to interact in one way or another with Fiat money in order to become more exchangeable and tradable. Many crypto exchanges still allow the purchase of lesser known coins only with Bitcoin, sometimes Ethereum. And those must often buy the investor first elsewhere.
Crypto currency: Future has, which offers increase in value
Digital currencies that want to stand out from the mass of coins and tokens must have a benefit. This is the only way to get users, investors and financial service providers, but also companies, interested in them. This interest is reflected in market capitalization. Therefore it is not sufficient to ask, “which crypto currency has future” – instead one should ask, “which crypto currency has interesting and/or useful however position characteristics The future comes in this case by itself. To the areas of application already realized belong
- Technological-administrative added value through intelligent contracts
- Bridges between crypto and fiat currencies
- Lead currency status through market dominance
- Stable purchasing power through reliable collateralization with Stablecoins
SMART CONTRACTS AS THE BASIS OF A CRYPTO CURRENCY OF THE FUTURE
One example of this is Ethereum’s intelligent contracts – the network is a Bitcoin clone, but from the very beginning it was set up with the intention of adding value beyond the mere payment power of the token. And Ethereum had resounding success with this. The counterfeit-proof Smart Contracts allow the exchange of goods and services against payment without the need for intermediaries such as lawyers or notaries, who are often indispensable in the analogous world. For goods and real estate transactions, but also for financial services, this is an ideal medium, which has been discussed and realized with Ethereum since the 1990s. Ether, the token, is merely the means of payment in a block chain that is becoming interesting for more and more companies – and recently also for the Swedish furniture giant IKEA. Anyone who can offer such a business model and stand out from the competition with well-rounded technology has a good chance of becoming one of the coins that deserves the title of crypto currency with a future.
Further application possibilities for crypto currency of the future
The use of the block chain for intelligent contracts can be continued considerably. An application in the creative industry, for example in the use and payment of music downloads, offers artists and their fans a win-win situation that does not require the costly services of international music agencies and publishers. The same applies to the gaming scene: a market with enormous growth potential, where gaming solutions and add-ons can be sold directly from programmers to end users via a block chain. The simply “knitted”, yet incredibly reliable Smart Contracts are thus taking digital consumer behavior in the third millennium to a new level, beyond platform economies such as Amazon or eBay.
And without the Blockchain, the implementation of completely independently acting and interacting machines, the “Internet of Things” or IoT, would be unthinkable. Platforms already exist in this field, too, which will allow the “intelligent” devices of the future not only to communicate with each other and register requirements, but also to cover these requirements immediately – and pay for them. The digital currency IOTA should make it possible for the refrigerator to order food and cars to pay parking fees.
Market dominance as a criterion for the lifespan of a crypto currency
A digital currency that is interesting for users must therefore offer something for users to use. However, it is not enough for the spark to be ignited by relatively few users. For a coin to hold its own, it is important for it to circulate and be distributed. The Bitcoin is the best example of the importance of high distribution. With almost 70% market share and a market capitalization of a total of 171,849 million U.S. dollars, BTC now has the status of a digital reserve currency and more than enough market dominance to secure its future – even though faster, more anonymous, or more secure solutions have long been available, the wide distribution and wide acceptance of Bitcoin will ensure its long life.
Standalone or Cooperation
While Bitcoin as a standalone is not badly positioned, other coins or tokens depend on the platforms behind them cooperating with relevant companies. An example of this is Ripple, a project that deals with the connection of crypto currencies to the international network of Fiat financial service providers. The goal is to enrich and improve global payment transactions by adding the block chain. Anyone who has ever tracked an international bank transfer or made costly transfers with Western Union knows that there is still plenty of room for improvement. Without the cooperation of established financial service providers, such a project could not even take off. Stellar Lumens is similarly designed, but for private use rather than institutional use. Coin was able to post good price gains when IBM began to take an interest in the platform.
Other coins were developed by companies from the outset and designed as an “internal” means of payment, such as the Chinese Binance Coin. Another example of this type is the Coin Libra planned by Facebook, which is already causing unease not only in the financial markets due to the size and influence of the company behind it.
Although not all crypto-currencies rely on “sponsors” or direct cooperation with well-known brands, in the end it’s all about the acceptance of each new coin as a means of payment. If this is not given, they become useless and the Blockchain project behind them dies a quick death.
The cross with the stability
Bitcoin and the other well-known digital currencies, at least the top 20, tend to be extremely volatile, with a high level of volatility not only over the course of a month or week, but even on a daily basis. Price fluctuations of more than 10 percent in both directions within a few hours are not uncommon. This represents a considerable obstacle when using crypto currencies in everyday use, because as is common with fiat currencies, money is supposed to be a medium of exchange with a reliable value that remains constant over long periods of time. If the medium and long-term purchasing power is not secured, crypto users cannot rely on the currency.
Developers are striving to find solutions to this problem as well – in this case the so-called stablecoins. Such stable crypto currencies are secured by another asset and are intended to build a bridge between crypto and fiat currencies. They combine the stability of national currencies with the immediate, confidential payment execution of crypto currencies. Tether (USDT), a stablecoin that is linked to the US dollar, is well known. The Facebook project Libra is also to be linked to an asset basket. A link to the gold price would also be conceivable.
A stablecoin like tether is relatively well protected against inflation and, due to its stability, not interesting for investors or speculators – instead, the concept is expressly suited to bring the tokens to the people.
Crypto currency: future of money, money of the future
In view of the numerous possible applications for crypto currencies and the block chain, there is probably no need to worry about digital currencies disappearing again. On the other hand numerous users naturally ask themselves whether the Coins will replace the “real” money sometime. This is not very likely, but also not completely unthinkable. After all, the purchasing power of national currencies is also based on the consensus to recognize them as a means of payment – in this case, however, secured by the economy of the country concerned. But here, too, it has long since ceased to be so-called “commodity money” – in other words, currencies that were still common up to the beginning of the 20th century, when money coins received their value from their gold or silver content, or were secured by national gold stocks.
Today, the central banks of states control to a large extent the rates of the national currencies, a system whose vulnerability was already evident ten years ago. Growing doubts about the validity of the international financial system are one of the reasons why Bitcoin was created in the first place and why investors are increasingly interested in digital currencies.
It is realistic to assume that crypto and fiat currencies will coexist in the near future, because the use of block chaining will no longer be economically viable and this makes corresponding tokens a necessity. Acceptance will continue to increase thanks to digitization, user convenience will continue to improve, and integration into the global financial system is no longer unthinkable.
Invest and trade with the crypto currency of the future
The financial world has already tuned in to the newcomers. The major banks already offer crypto funds, and derivatives such as certificates and CFDs are also tradable. While the established digital currencies such as Bitcoin, but also Ethereum, are more likely to stabilize in the long term and are therefore suitable for patient investors, derivatives are a way to profit from the (still strong) volatility of prices in day trading in the short term. In particular contracts of difference on currency pairs from crypto currencies and euro, US dollar or British pound are ever more frequently components of the trade offer with Forex and CFD brokers, who give thereby also to private investors and traders the possibility of speculating on the price development of crypto currencies. Since contracts for difference are constructed in such a way that one can speculate with them not only on rising, but also on falling prices, they are particularly suitable for exploiting the volatility of the coins. Moreover, CFDs can be leveraged, even if with cryptos only by a factor of 1:2. For traders, this is certainly an opportunity to earn good returns – provided, however, that you are willing to familiarize yourself with the subject and keep an eye on the developments in the crypto world. Because only with consideration of the trends and market messages traders can profitably anticipate the course of the prices. A broker, who supports here with training offers and information, and the possibility gives of executing first crypto trades with a demo account, helps practically with the entrance – first without financial risk.