Future of Cryptocurrencies

11.10.2018

Author- Dipanjan Datta

Introduction

Increased digitization gave birth to cryptocurrencies, which is handled through utilization of advanced encryption techniques. This cryptographic approach made transactions decentralized while optimizing the business operations. Researchers stated that if used properly, cryptocurrencies and blockchain technology can play a great hand in transforming functionality of various industries.

Definition of cryptocurrencies

Cryptocurrencies, alternately termed as ‘virtual currencies’, is created and handled through use of advanced encryption techniques essentially known as cryptography. It enable functions in the form of currency issuance, transaction processing and network verification. Crypto transactions use blockchain technologies, which stores user data in a publicly distributed ledger database. This allows any individual to view the details of other users’ transaction history but without being copied or alteration. Crypto transactions are decentralized in nature and this eliminates the need of intermediary bodies like banks and government to validate those transactions. Apart from these, there are minimal transaction charges, when compared to banks and other financial institutions, which further ushers cryptocurrency to flourish in this digital era.

Future of cryptocurrencies

The concept of cryptocurrencies is very much trendy in the developed countries but most people of the developing and underdeveloped countries are not fully aware of its potential. Cryptocurrencies are capable enough to preserve user anonymity in transactions while preventing all sorts of money laundering attempts by hackers. With cryptocurrencies and blockchain technology, there is no need of huge record keeping of user data in a single computer and thereby, lessening the workload of staffs. Blockchain powered crypto transactions store user data in a network of computers rather than on a single computer and making it a mounting task for hackers to get access to users’ personal information. Cryptocurrencies conjugated with blockchain and AI have the potential to revolutionize the key segments of various industries be it financial, real estate, IT, HR or industrial regimes. In future, it will also diversify the prevailing payment methods, improve international trade agreements, optimizing prevailing banking systems while facilitating currency exchange in the global market. Despite its immense potential in the economic arena, cryptocurrencies are also trying to satisfy the wider criteria conforming to the social goals. The latest concept of ‘green cryptocurrencies’ is groundbreaking in contributing to a sustainable digital environment. Apart from these, there are scam cases relating to crypto-mining and crypto-transactions and investors have to be careful before engaging in an ICO campaign.

Conclusion

It will not be an exaggeration to state that virtual currencies have the necessary potential to replace traditional fiat currencies. Besides bringing transparency in operations and accelerating the transaction process, cryptocurrencies are empowering individuals giving them the flagship of ‘financial democratization’ in absolute terms.