Should we rely on Cryptocurrencies like Bitcoin?

Cryptocurrency is a digital currency that operates independently of the government. This uses cryptography to regulate the generation of the units of currency and to verify the transfer of funds. Bitcoin is the earliest and the most popular cryptocurrency. There are more than 900 cryptocurrencies available over the internet. Bitcoin and Ethereum have the most demand. Now we will tell you whether we should rely on cryptocurrencies like Bitcoin or we shouldn’t rely on it.

If we should rely on Bitcoin. Then why?

1. future belongs to technology. Cryptocurrencies make peer-to-peer financial transactions a lot easier. This currency can be sent from any part of the world to any part of the world. Hence there will be no struggle of exchanging currencies like Dollar or Rupee, etc.
2. While travelling the world, there will be no problem exchanging our currencies with local currencies.
3. Banks do charge us a part of the money we send or receive. Along with cryptocurrencies, middleman like banks will be eliminated, hence there will be no loss to us in financial transactions.
4. These transactions can be verified. Each coin is assigned a unique number.
5. One of the top economies, Japan officially recognizes Bitcoin as currency.

If we shouldn’t rely on Bitcoin. Then why?

1. Bitcoin’s wild gyrations in 2021 have made sure of something that the future of money will be electronic, but it won’t remotely resemble a cyberpunk utopia.
2. The mania and panic that has gripped decentralized cryptocurrencies are heightening the attraction of their coming rivals which is digital cash issued by central banks. These tokens will be staid, centralized and state-controlled.
3. Official electronic coins will be a new type of central bank liability that can cause investors to bet on the future value of the dollar, yen or the euro which won’t be a novel asset class.
4. To avoid becoming a lightning rod for fresh speculation means that a global economy powered by FedCoin, digital euro and China’s e-CNY will make far less onerous demands on energy resources than cryptocurrencies. In absence of a trusted intermediary, the “mining”, or proof-of-work protocol that keeps the blockchain secure from double-spending attacks but requires power-guzzling hardware.
5. Instead of being included in the race to solve puzzles faster than malicious actors, the nodes on the network can lock their funds to back legitimate transactions.
6. Central banks that aren’t constrained by how fiat money they can create out of thin air use that flexibility to avoid catastrophe, as they did during the COVID-19 pandemic. By contrast, a “Bitcoin-ized” economy can be dangerous because of a finite money supply.
7. Bitcoin as the earliest cryptocurrency will generate only 21 million coins which means when the demand for the bitcoin is more, the value of the bitcoin will increase. There will be a fill in the value of the currency completely depends on the demand it has which means if the major investors withdrew their money, the value of this currency will crash.
8. There is no governing body. If the cryptocurrency is hacked, no one will take the responsibility to repay our money.
9. Many cryptocurrencies prevailed in the market after the invention of bitcoins. New cryptocurrency may decrease the demand for earlier cryptocurrencies. Investing in such kind of currencies will be risky.
10. A cashless economy made financial transactions much easier. However, there is no need for cryptocurrencies.