Why Are People Suddenly Interested in Cryptocurrency?
Just a few years ago, cryptocurrency was a hobby for computer enthusiasts. Today, it is a billion-dollar industry, and its growth doesn’t seem to be slowing down. The price of Bitcoin (and other cryptocurrencies) has recently skyrocketed, making news headlines and spurring people into action. So, why are we suddenly so interested in cryptocurrency?
Increased Security for All
The safety of your money is always a concern, and many people are concerned that their government can’t be trusted with their cash. The number of people who feel they have no control over their financial situations is on the rise, and they’re looking for alternatives to traditional currencies.
Cryptocurrency is built on secure, decentralized networks, which means that the network is run by the people using it, and you don’t need official permission to use it. Cryptocurrency uses cryptography for security and makes it difficult to counterfeit because of this security feature.
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Cryptocurrency proponents argue that the most important thing to know about digital currencies is that they’re decentralized, which means no single entity controls them. Although it’s still in development and has some flaws, cryptocurrency is a revolutionary new form of money that is quickly seeing widespread adoption by offering a way to keep your hard-earned money secure from tampering and theft.
Growing Awareness and Applications
As we move into a more digital economy, it’s becoming more and more common to exchange goods and services online. Cryptocurrency is quickly becoming the most popular method of payment for these transactions since it allows anyone to send or receive any amount of money in a matter of minutes to anyone in the world, with little to no fees. This incredible efficiency is part of what has made cryptocurrency so popular. More and more startups and established companies are accepting cryptocurrency as a form of payment for their products, which is making cryptocurrency more and more visible.
New Investors Entering the Market
New investors are flocking to the cryptocurrency market as it has been growing by leaps and bounds. While the total value of the cryptocurrency market is still dwarfed by the total value of all stock markets on the planet, it is growing much faster than any of them. Cryptocurrency has piqued the interest of many inventors after witnessing early investors getting rich seemingly overnight. Crypto’s market capitalization—the total value of all cryptocurrencies—reached the $1 trillion milestone at the beginning of 2021, highlighting that cryptocurrency investments are becoming more mainstream.
Bitcoin Hitting New Highs
The price of Bitcoin and other cryptocurrencies has risen dramatically, leading to increased interest in the technology behind it. Bitcoin hit a new high in February 2021, when it reached $50,000 for the first time ever. The currency has been growing in value steadily since 2009 when the first Bitcoin was mined. Some investors, like former Fortress hedge fund manager Michael Novogratz, accurately predicted that the currency would continue going up in value, reaching $50,000 in 2021.
Ethereum Reaching New Heights
Bitcoin isn’t the only star of the crypto scene—Ethereum is also taking the world by storm. Ethereum has an entirely different architecture than Bitcoin. It is a ‘blockchain’ currency, which means that it is a digital token that exists on and is secured by a global network of computers, each of which must agree on every transaction.
Ethereum has the largest developer community behind it of any cryptocurrency. Unlike other currencies (Bitcoin, Litecoin, Dogecoin, etc.), there’s a ton of people working on projects and games for Ethereum. Ethereum is a system for running decentralized applications (DAPPS). DAPPS are applications that run on the blockchain itself, and they offer a lot of potential to revolutionize everything, from social media to lending to online voting.
While the Bitcoin network processes 3-5 transactions per second, the Ethereum network can process 10-15 transactions per second, and this speed is increasing as new technology is developed. This makes Ethereum much more suitable for use as a global currency than Bitcoin. In turn, this is why so many people are suddenly interested in Ethereum.
The Need for Blockchain
So, why the sudden interest in blockchain, the backbone of cryptocurrencies? Well, it’s likely due to the current hype cycle for the technology and the lofty expectations surrounding it. There have been many attempts to create an incorruptible digital ledger that is isolated from centralized control, but none have been able to eliminate the need for trusted guardians until blockchain. Blockchain technology could have a world-changing impact on how we verify transactions.
In the 90s, the internet was popularized by the mainstream through the use of browsers like Netscape. Then, email became available on these browsers, and we saw the growth of ISPs. Faster internet speeds and the growing number of users also brought along the rise of file sharing services such as Napster. These were all revolutionary concepts that changed the way we use the internet and the way we live our lives. But all of these innovations still revolved around centralized models and centralized institutions.
Internet users are getting more and more frustrated with the centralized models, and they can see that there is something better out there. Blockchain technology is the answer to these frustrations and offers a decentralized ecosystem that offers better services and greater privacy.
Blockchain is a distributed ledger—a way to record transactions or any digital interaction in a secure way. Each transaction is recorded and kept in a block. If anyone tries to change the transaction, it will be obvious because of the “chain” structure. This makes blockchain technology secure, transparent, and highly resistant to fraud. Blockchain technology was initially used to track and verify transactions made with Bitcoin, but its potential use cases extend far beyond that.
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Cryptocurrency has been getting a lot of recent attention from the mainstream media, with articles about how cryptocurrency could “change the world” and how it is already changing it. It’s not just hype: as mentioned, cryptocurrency’s market cap is skyrocketing, and there are plenty of good reasons why people would want to get in on this new trend. The reasons for this are deeply rooted in cryptography and decentralized networks, but it’s important to remember that cryptocurrencies are, at their core, a monetary system.