Published 20 February 2021
It is almost a decade since we were introduced to the idea of cryptocurrency. We all had our reservations when it was first presented, but now a decade later, we are more open to the idea of digital money. However, the acceptance of cryptocurrency doesn’t mean that there are absolutely no doubts about it.
Maybe a decade of success is not enough to make people believe in the power of something that is not tangible. People are still more into real money, and a fair portion of society resist investing digitally. This has been one of the significant hindrances the idea of digital money has to face. It is not easy to trust something that cannot be offered them in hand. This became the reason for
Despite the resistance and uncertainty about cryptocurrency future, it took off really well, and the last couple of years showed remarkable progress. Let’s have a look at some useful purposes this currency serves.
Let’s begin with crypto assets. These are not pegged to any national currency, which is definitely a plus point. It is considered an international currency that doesn’t require an exchange and face any loss. You must be thinking if it is so beneficial that people still don’t want to invest in these assets. The reason is the fear of the future, simple!
Where no one can predict the future accurately, any right minded person would know that when the value of something can go up rapidly, it can fall at the same speed as well. What if it happens with the crypto assets as well? This is the reason many people are spectacle about investing heavily. Their concerns are justified because no one wants to lose, only because they didn’t play smart.
It’s alright to use crypto assets for modest purchases, but the moment to you use them for bulk purchases, it becomes risky. Whereas; Dollar, Euro, or even a currency like Mexican Peso are not so volatile. This also became the reason for doubts the public has regarding cryptocurrency prices and bitcoin prices.
In case (and given the circumstances, there is a high chance) virtual reality takes off, the virtual world’s economies will span over several nations. With these networks in action, cryptocurrency will become a convenient payment mode. It may even surpass the Dollar and Euro in value. Cumbersome requirements of reporting for large currency transfers will pave the way for cryptocurrency dependency.
However, the use of crypto-asset to buy a property or a new car or make any purchase of this kind is still very much unclear. Consequently, where on the one hand, we see a bright future for digital currency, on the other, we are still in the dark. The continuous up and down in cryptocurrency price also play a role in developing ambiguity around it.
There is a group of people who wants to evade taxes, and in their desperation, they are not even sparing cryptocurrency. They postulate a world where crypto transactions will not be transparent and 100% traceable by the authorities. This will make way for the buyers and sellers to avoid the tax system.
Technologically, this level of anonymity is entirely possible. The black-and-grey market thriving presently is proof of loopholes that can be misused in the future. If you own most of your economic life outside of the virtual world and that too within the same country, you won’t be able to evade all of your taxes. Also, the governments can always change from transactions to wealth for taxes. In reality, crypto tax evasion is more like a fringe than mainstream exertion. Originally, the trend of digital currency is to facilitate the cooperation of tax collection by giant technological companies rather avoid it.
The recent trends are implying that major companies will be adding this currency to their balance sheets. There is a probability of crypto being treated like gold in the balance sheets in the coming future. The corporations will be investing in crypto assets that are institutionalized. The coming era will see heavily regulated crypto assets and financial institutions that will be crypto-linked.
If we consider the current graph of progress for cryptocurrency, the ideal notion it proposes is; crypto needs to remain fringe and mainstream to gain the power currently held by tangible currency. This path is going to be really tough for the virtual currency. All we can do is wait and watch!