The Growth of Cryptocurrencies

By Ahan Gupta

The exponential growth of cryptocurrencies has conquered not only the E- World, but the globe as a whole. Right from the bullish Bitcoin during the covid era to the vivid currencies being established every day. The cryptocurrencies had transcended the world of finance and drastically changed the “formal” revenue system, changing the lives of millions.

Cryptocurrencies have caused  a stir over the last 10 years in the finance world and far beyond as well. Due to their nature as electronic money, cryptocurrencies are modernizing classic finance and displaying a new avenue when it comes to things like transactions and investing. This article will introduce two of the most prominent cryptocurrencies, Bitcoin and Ethereum, explain their functions, discuss their adverse effects on traditional finance, and discuss possible employment of these currencies in the future.

Cryptocurrency are digital assets that use cryptography for maximizing security, making it hard to duplicate its spending. Most currencies are actually decentralized networks based on blockchain. This is what distinguishes cryptocurrency from traditional government-backed (also called "fiat") currency which on the other hand lays its powers on a centralized banking system for regulation.

Bitcoin and Ethereum are  the most accepted and formally known cryptocurrencies. BTC was put into place by Satoshi Nakamoto, in 2009, and went on to be what is now called, informally,  as the largest cryptocurrency when we speak about Market capitalization. The primary function of bitcoin is to be kept as an asset. Additionally, it takes the role of a medium that can be used for the purposes of exchanging and is said to be the building blocks of the cryptocurrency market.

In 2015 Vitalik Buterin, a programmer that is in his early ages created one of the largest currencies, Ethereum! Ethereum is more vast than just a currency. Ether (ETH) is the original currency of the Ethereum blockchain. Ethereum is decentralized  for building and executing smart Contracts-self-executing contracts  with the understanding between 2 parties is automatically diffused with the code for that particular currency . 

Traditional banking procedures can be significantly impacted by cryptocurrency, becoming faster, more safe, and more functional. 

One of the biggest pros of cryptocurrencies is their decentralized structure. This structure enables transactions to become much easier and less heavy on the pockets by leaving the need for mutual parties like banks. As a result, banks and consumers can save money because they no longer need to pay fees for money transfers or processing. Cryptocurrencies are also a desirable alternative for cross-border transactions because they are not governed by central bank or governmental laws. Additionally, compared to traditional payment methods, digital currencies offer quicker transaction cycles. Crypto currencies and blockchain technology allow users to send money quickly and safely without having to wait days for transaction confirmations. Hence, banks and consumers save money since they do not incur charges for transferring money or processing. Cross-border transactions also become a more desired form of transaction since cryptocurrencies are not subject to either the laws of the central bank or those of the government. Compared to traditional payment methods, digital currencies offer faster transaction cycles. The use of cryptocurrencies and blockchain technology can allow the instant transfer of money without any waiting time to have transactions confirmed. Cryptocurrencies and blockchain technologies are therefore better suited for quick transfers such as online shopping.

Lastly, cryptocurrency develops new avenues for overseas investment in 

developing nations. Because it functions away from the

 government, it gives the citizens access to financial 

Platforms allow things like trading and investing that, before, were beyond the bounds of the people of emergent nations because of political or financial limitations. By fostering innovation and entrepreneurship in these areas, these new investment chances  can craft an environment that can aid in transcending economic growth and an increase in employment.

Given the very high popularity of cryptocurrency, it is now a fully decentralized digital currency system. It has cryptocurrencies that include Bitcoin, Ethereum, among others, offering uses from smart contracts to the development of digital payments. The reality, however, remains that while more and more governments as well as the financial sectors have started studying blockchain technology, challenges that cryptocurrencies still face include market volatility, regulatory uncertainty, and barriers to adoption. Other recent trends include integration into mainstream financial systems and businesses.

Cryptocurrency seems to have a very vibrant and diversified future. Advancements in blockchain technology can possibly make transactions faster, cheaper, and more secure, that would massively encourage adoption. Central Bank Digital Currencies (CBDCs) are under investigation by governments in a search to balance innovation with control. Web3 and DeFi will potentially totally overturn all traditional financial paradigms. problems such as money laundering, fraud, and environmental troubles related to

Also thanks to mining activities. Integration with AI and the Metaverse might also enable novel applications.

Cryptocurrency has evolved from a specialist creation to a serious player in the global financial system. Cryptocurrencies have the potential to fundamentally change how we think about money, ownership, and online interactions, even though there are still challenging aspects to be addressed. Either way, with advancements in technology and regulations, cryptocurrency can remain a speculative asset class or thrive in the global economy. Further into the future, to ensure sustainability, security, and accessibility, developers, regulators, and users must collaborate.

Bibliography:

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2. Vujičić, Dejan, and Siniša Randić. “(PDF) Blockchain Technology, Bitcoin, and Ethereum: A Brief Overview.” ResearchGate, May 2018, www.researchgate.net/publication/324791073_Blockchain_technology_bitcoin_and_Ethereum_A_brief_overview.

3. “What Is a Smart Contract in Blockchain? - Utimaco.” Utimaco.com, 22 Jan. 2020, utimaco.com/service/knowledge-base/blockchain/what-smart-contract-blockchain.