The Rise and Fall of the Star: Is Crypto Here To Stay?

Many people are unsure if crypto is here to stay or just a flash in the pan. To answer whether crypto is with us for the long haul, it’s important to first understand the issue most cryptocurrencies hope to solve.

Cryptocurrencies like Bitcoin and Ethereum incentivise the creation of high-quality distributed applications by rewarding developers with new tokens that were not previously in circulation — also known as “blockchain mining”.

This prevents applications from being restricted by centralised power, so they can be open source and publicly owned instead. Crypto mining means that many coins are created with few going to any one person; this makes it more difficult for any single person or group of persons to control more than 50% of a currency, which is the key problem many traditional currencies face.

(Image Source: Geeks For Geeks)

While solutions to these limitations already exist, cryptocurrencies are still in the early stages of development. Problems like transaction speed, fees, and security (among others) all need solving before mass adoption can occur. There are many projects that are currently working on these issues; however, none have yet been able to achieve significant results.

Accommodating new technologies

There is a significant time gap between the implementation of new technology and its widespread adoption by users. It took about 20 years for the internet to gain mass adoption, and it took about 100 years for electricity to be widely adopted after it was first introduced.

While these examples might seem like bold comparisons at first, both electricity and the internet were used primarily to make traditional infrastructure faster — such as communication or transactions. Cryptocurrencies attempt to solve problems by creating new processes, so it’s likely that adoption will be slower than in previous examples.

This is not to say that cryptocurrencies aren’t inherently useful, but to highlight that any completely new technologies require significant time for development before widespread general adoption can occur. While in the short-term, many aspects of cryptocurrencies are uncertain, in the long-term, we can expect crypto to remain a valuable tool.

We’re already seeing evidence of emerging technologies adapting their development to incorporate crypto. For instance, recent years have seen the rise of blockchain smartphones, which can be used to securely store Web3 and cryptocurrency-related data.

As the smartphone market continues to roll into 5G, we’re likely to see more crypto-facing solutions arise from the greater levels of connectivity and data speeds boasted by the devices. Yet, 5G is still not widely available to the masses.

How will cryptocurrency change the world of fiat?

(Graph showing the number of identity-verified crypto asset users from 2016 to November 2022. Image: Statista)

The mass adoption of crypto will greatly change the financial world. The main benefit of cryptocurrency is that it’s decentralised — meaning that it’s not controlled by any bank, country or government. If a new cryptocurrency becomes popular, it will be harder for any central authority to control the number of units in circulation and the amount of money that’s transferred electronically.

The next generation of consumers is looking for more transparency, privacy and control over their money. Consumers want more functionalities that can be linked to their social media identities and bank accounts.

For example, a customer can use Bitcoin or other similar cryptocurrencies to buy a car through an app instead of using cash or a credit card every time. A person can also transfer money instantly to another person on the other side of the world without paying any fee or waiting a few days before the money arrives in his bank account.

However, there are still some issues that need to be solved before the cryptocurrency is used by the masses. The most pressing issue is security, which seems to be one of the main problems in the world of crypto. Many hackers have been stealing cryptocurrency from people and exchanges. Not only is it difficult to track down these thieves, but also it is difficult to reverse any transactions that have already happened because every transaction on a blockchain is necessary for validation.

It’s estimated that more than $1 billion has been lost in cryptocurrency hacks. Until the crypto landscape becomes more secure and less vulnerable to hacks, it will not be widely used by the masses.

While the world of cryptocurrency still appears set for a bright future, there’s still a lot to be done before mainstream adoption can be achieved. However, the potential that decentralised currencies hold for empowering more users to gain more control of their finances is too great to ignore.