We’ve already seen Bitcoin hit multiple new all-time highs in the last year — after which there have been significant drops. More institutional buying has helped Ethereum, the second-largest cryptocurrency, reach a new all-time high in late 2017. The Biden administration, as well as government officials from the US, have shown increasing interest in cryptocurrency regulations.
Meanwhile, interest in cryptocurrency has exploded: it’s a hot topic not just among investors, but also among the general public, thanks to everyone from long-time investors like Elon Musk to that high schooler from your class on Facebook.
But that growing interest in cryptocurrency has changed the nature of the game. Long gone are the days when you could simply buy and hold, or sell at a modest profit. Now, there’s speculation about whether shorting is even possible with some cryptocurrencies. If you want to check the latest crypto news visit https://bitcoin-champion.app/.
Cryptocurrency Regulation
Expect further debates on cryptocurrency regulation. Regulators in the United States have been particularly interested in stable coin rules.
The US Securities and Exchange Commission is unlikely to prohibit cryptocurrency, according to the chair of the Federal Reserve. At SEC hearings, both he and the CFTC have stated that they have no intention of banning bitcoin in the United States. Meanwhile, the IRS has a clear interest in educating investors about how to properly report virtual currency when they file their taxes. Just as with other things on the digital currency market, the regulation comes with difficulties.
Broader Institutional Cryptocurrency Adoption
This process of interpreting cryptocurrencies, tax evasion, and money laundering is not something new. Cryptocurrencies have been associated with illegal activity from the very beginning, but it seems that they are now slowly being accepted by mainstream financial institutions. In many ways, this has to do with blockchain technology itself. While bitcoin was initially seen as a suspicious virtual currency subject to fraud and illegal activities, more recent projects have tried to improve their image, focusing on a wide range of applications for all types of use cases. And most seem to agree that blockchain will be one of the main technologies in tomorrow’s world.
Environmental damage
The rising popularity of the cryptocurrency industry has drawn more attention to its carbon footprint. Bitcoin and other cryptocurrencies are generated or “mined” by powerful computers competing to solve difficult mathematical problems that consume energy and produce global-warming emissions unless they run on power from renewable resources. Bitcoin mining now consumes about 0.5 percent of worldwide electricity consumption, using up more electricity than Sweden does in a year.
While the bitcoin blockchain continues to rely on “proof of work” (POW) by burning energy, other blockchain technologies are considering alternative ways to provide their services. Meanwhile, cryptocurrencies that require little mining power are becoming more common.
The Future of Cryptocurrency
No one can accurately predict what will happen in cryptocurrency markets. While it is clear that there will be increased pressure from the SEC, CFTC, and IRS on tax compliance, there are also great opportunities for legal investment in cryptocurrency. The popularity of cryptocurrencies is growing exponentially at this time. It looks like they are here to stay if not grow even stronger as central banks begin to accumulate them as reserves. As millennials become a larger part of financial markets, expect cryptos to grow with them. Even if individual cryptocurrencies begin to fail, mass adoption of blockchain technology will continue.
About Cryptocurrency
A cryptocurrency is a form of digital currency that is designed to be secure and, in many cases, anonymous. It is a currency associated with the internet that uses cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers
History of Cryptocurrency
CryptoCurrency has been around since the early 1980s when computer scientist David Chom invented “Chomskian Currency.” This was much like Bitcoin in that it was a paper with strings of numbers on it. However, there were no digital protections, and people could wipe their hands clean after rubbing them all over it. Therefore, it was never taken seriously.
The widely known cryptocurrency, Bitcoin, was released in 2009 by an anonymous developer who went by the name of Satoshi Nakamoto. The most advantageous feature of this currency is its anonymity, which makes it very difficult to trace transactions. This is because there is no central record-keeping system for Bitcoin; instead, transactions are recorded on a public ledger called the blockchain, which makes it very difficult to determine who is buying or selling.
Bitcoin was initially used by anti-establishment enthusiasts after being banned by PayPal and other financial institutions. Now, Bitcoin is accepted as an official currency in Japan for purchases of goods and services. This move has effectively legitimized Bitcoin as a legal form of payment. Since then, many cryptocurrencies have been introduced into the market, using variations to Satoshi’s protocol that address improved security issues or create new features. These are known as altcoins ( alternative coins ).
CryptoCurrency & Security Concerns
Encryption techniques allow you to generate something called a cryptographic hash—a string of letters and numbers that acts as a unique fingerprint for any piece of data. Any tiny change in the original document will drastically change the hash, which makes it easy to detect even the slightest of alterations. By using public and private keys (long strings of numbers), you can send cryptocurrency safely over the internet. Because everyone is keeping track of all previous transactions with blockchain technology, you cannot spend currency that does not belong to you. This means there is no way to spend the same bitcoin twice–even if your name isn’t Satoshi Nakamoto!
Conclusion
Cryptocurrencies have gained their popularity from being decentralized, which means they are not governed by any central authority. Their anonymity has been both a blessing and a curse. Although there is no doubt that it provides criminals with an easy platform for executing fraud, this same feature protects regular users against identity theft. The challenge of cryptocurrencies will be to stabilize themselves once accepted worldwide. This will require regulations, but also developing new uses to provide stability in the coin’s value.
