Things that work against Cryptocurrency
Cryptocurrency is becoming more and more popular. A lot of shops are accepting one or more cryptocurrency as a legitimate form of payment. The next step is that cryptocurrency gets recognized as an official currency.
The official Status
Cryptocurrency is the way of the future of that I am sure. But while this futuristic form of payment is surging forward the rest of the world seems to be playing catch up.
There are a couple of things that keep cryptocurrency from being recognized as an official currency.
The list of things working against cryptocurrency
The Standard
There are simply too many of the damn things. From a technical viewpoint this is good because this opens the way for new innovations and functionality. But the general public is used to using one form of currency and not a couple of hundred. This is one of the reasons why the euro was introduced instead of every European country using its own currency.
One crypto has to become the standard but how to decide which one? Bitcoin, Ether, Neo, Ripple, Dash, Litecoin, there are numerous candidates and all have their own advantages. It also leads to another interesting question. Let's say for argument's sake that Bitcoin becomes globally recognized as an official currency, what will happen to the other cryptocoins?
The Stability
Investing in cryptocurrency should come with a warning sign: Get Ready for the wildest ride in your life! The value of the coins can increase at insane rates and even worse, drop at the same rate. It is not uncommon that a coin can double in value for no reason at all one day and lose half it's worth the next.
Imagine if Google (worth $600 billion) decided to invest 1% of its value in crypto, that would be 1 billion dollars. The impact would be huge, the coin would surge but chances are that the coin could also take a dive shortly after because everyone else would sell (taking the profit).
Would a major company take the chance of betting on cryptocurrency if there was a chance that their value could be cut in half? And if companies are reluctant to take a chance what do you think Joe Average would be like if suddenly his paycheck is worth only half of what it was the previous month?
Anonymity
Most people believe that with cryptocurrency you can do anonymous transactions. This is not completely true, all transactions are visible for everyone to see in the blockchain. We can track all transactions back to the addresses of the coin. The thing is however that it is not always possible to verify who is behind the coin address.
Governments and Tax organisations like the IRS want to know exactly how much money you have and as long as you are able to hide substantial funds in a semi-anonymous cryptocoin wallet, there is little chance that they will embrace this currency.
Actually I also think that recognizing Bitcoin as an official currency will help battling the money laundering. Bitcoin will be subject to strict regulations. Chances are however that the unregistered funds will just be moved to another unregulated coin.
Give me my money back!
Payment can't be reversed. This is one of the major problems of cryptocurrency. If you make a mistake while transferring coins, chances are you will never get it back. This is not something you want to burden consumers with, mistakes are easily made but it should not be that when you type or copy/paste a wrong address that this automatically means that you've lost your money.
Maybe in the future there be a function that will verify an address before you send your funds.
Good or Bad?
I would also raise the question if becoming officially recognized will actually be a good thing for cryptocurrency. At this moment there is a lot of freedom and "becoming official" will mean regulations. Regulations will lead to less freedom and less room for innovation. The fun thing about cryptocurrencies is that people come up with some crazy and wild ideas. Some succeed, others crash and burn, but the most important thing is that they tried. The attempts contribute to the growth and maturity of the crypto market.
My fear is that when Banks, Governments and Tax agencies step in that the freedom experienced in trading and development of crypto will come to a screaming halt.
What do you think? Will cryptocurrency ever be globally recognized as an official currency? And will this be a good or bad thing? Let me know in the comment section.
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Great questions that i'm not smart enough to answer... the whole thing is a lot of fun, but who know where it will end up. I guess the best case scenario is that many different cryptos have their different niches in currency, security, transactions... certain networks, communities, countries... who knows
That is the most likely outcome. The crypto movement is too big to be stopped. Adoptuin by the government might change things around. But like all things on the internet, if you shutdown one site and another pops up. So even if bitcoin becomes official and regulated another unregulated coin will take its place (my two cents).
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