In the world of cryptocurrency, there are many innovations on the horizon that could radically change how cryptocurrencies are used and why they exist. Cryptocurrencies like Bitcoin and Ethereum will need to adapt if they're ever to survive in this new era.
It shouldn't be much of a surprise that cryptocurrency is a hot topic these days with all the talk about it being digital gold or people buying Lambos with Bitcoin or whatever. Like any good tech, people can't seem to stop talking about it. And like all good tech, there's also a ton of speculation on what's to come.
The truth is that very little of the widespread speculation about what's to come for cryptocurrency is based in reality. If you look at the current state of affairs, there are indeed things that need fixing and improvements on the horizon. However, most of the ideas being presented both by cryptocurrency developers and people looking to get rich quickly are just not viable or reasonable in any way. The future of cryptocurrency is bright, but it's not too bright.
Here are a few things that will be needed to help make cryptocurrencies more mainstream and less interesting, but also a few that will eventually be quite dangerous to those who use them.
With all the blockchain hype out there, it's kind of hard not to get excited about the prospect of cryptocurrencies in general. Especially for those who have just entered the space or are really looking to get into it.
Cryptocurrency has a lot of potentials to change things and make life easier, but the current state of affairs isn't all that great for newbies or people not involved in the space. As far as user experience goes, it's pretty terrible. There's a huge barrier to entry and most people don't even know where to start.
The current state of the economy isn't necessarily all that attractive either. Most people think the value of Bitcoin is going to hit a ceiling right around $40K. In reality, Bitcoin is trading at today's price of around $36,000/GB. The only time someone would want to start buying Bitcoin right now is at that level, but that price is clearly not worth holding. The main reason being that it's overvalued on the exchange side, so people are buying the Bitcoin in droves while the market price doesn't change much.
However, a lot of folks are now experimenting with cryptocurrencies and are seeing the potential value and opportunity that cryptocurrencies can bring to the economy, but most don't understand how this will work in practice. A lot of people will just buy Bitcoins just because they think it's a good way to fund their start-up (because that's the easiest way to do it) and then they'll forget about it for the next few months when the market crashes back down and they need to get back to them. The reality is, newbies can't buy Bitcoin right away and investors can't buy Bitcoins in bulk because most exchanges take months to process all the new orders. So that leaves newbies with lots of time invested into buying cheap and waiting for the crash to happen to return the interest.
It's much more rewarding to invest in the long run when you're not buying Bitcoin and when the time comes to buy Bitcoin you have a long term return.
But it can't stop there. For example, think about how you feel if you bought Bitcoin back then. Would you feel much happier today? Would you be much happier when it started declining a few months after? Maybe you would if you knew how the market would behave, but that doesn't help you when you have to take that step of just getting out of Bitcoin and selling. This also happens when you buy a car with a cheap loan that gets canceled on you after just a few hundred thousand. Even if you're a believer that this happens to you when buying the first car with a cheap loan, it's much better to just wait until it all goes bust before trying to sell it. But if you're buying Bitcoin through Coinbase, you already have a bank account and when the time comes you'll be able to use it to trade at an exchange.
And the Bitcoin industry doesn't just help people buy or sell Bitcoin. When people learn about the currency and get into it, they usually see this as a great way to make more money. It's one way to do something that is a waste of money to some extent. And this also drives up confidence when it comes to investing in Bitcoin, since you already have something that is much more secure, and that's the people who believe you should be buying the future instead of the past.
We're not going to prove that investing in Bitcoin is the better investment for you. But if it turns out that your investment is just a bunch of nonsense, we hope that it still is beneficial. And we are definitely not calling that a "false investment" if you don't end up getting out.
