Cryptocurrencies – the future of finance or a passing trend?

Photo Credits : André François McKenzie | Unsplash

It is difficult for those who observe all this from the sidelines to understand the phenomenon of cryptocurrencies at all, let alone predict what will happen. While the cautious ones warn that this is a speculative market, technology wizards think it is a journey of no return.

Cryptocurrencies and big players

The market exploded, so big players entered the story. Banks, mutual funds, even Elon Musk.

Jamie Dimon, CEO of the world’s largest bank Jackie Morgan Chase, was very clear in 2017 that cryptocurrencies are a scam, that it is a means of payment used for human trafficking, and he was a huge opponent of cryptocurrencies. In the first half of 2020, JP Morgan Chase opened bank accounts in the largest American cryptocurrency exchange offices.

In the second half of 2020, JP Morgan Chase analysts estimated in internal memoranda that the price of Bitcoin could go up to $ 150,000 and gave the green light to invest. So from the biggest enemy of cryptocurrencies, the largest bank in the world has turned into an institution that encourages its clients to invest in cryptocurrencies.

The reason is very simple, everyone wants to be at the beginning of something that is in development until it is seen how it will end, no one wants to miss the opportunity to be first and see how successful the product will be.

When we talk about funds, Goldman Sachs and others have funds of thousands of billions of dollars, so their investment in cryptocurrency, in relation to total assets, is very small. It is not a problem for them to enter cryptocurrency with one small segment of their property, and if they make a great profit, if they make a loss, they will survive.

Investing in cryptocurrency is a complete risk for investors and there is no protection. When we talk about cryptocurrency, there is no protection against the state participating in any way in compensating clients, because just as it does not participate in growing value and profit distribution. Also, it does not participate in the losses. Therefore, investors themselves are exposed to risk.

It is a highly speculative financial instrument and when you invest in cryptocurrencies you must be really ready to lose everything you have invested.

Paying for coffee in cryptocurrency

Cryptocurrencies are slowly but surely coming down from everyday spheres in which the big guys want to spin big money into everyday life.

The story with cryptocurrencies began after the first lockdown, on May 11 last year. “I wanted to make some boom, wake people up so I introduced Pi as a means of payment in my cafe. People accepted that they were thrilled, I received a lot of calls, messages… They were interested in how it works. That first coffee was paid for by Pi and portals all over the world wrote about it,”  says a cafe owner.

– “It is very simple, a young gentleman ordered coffee, we prepare the order, you choose the type of payment, the check comes out. We enter the program, enter the amount that is on the check, enter the check number and now choose the cryptocurrency with which we want to pay. The young gentleman will probably choose Bitcoin and that’s where the barcode comes out. The cell phone is scanned and the green tick means that it has been paid and the money is immediately in the account,” the owner explains.

– “The moment the guest pays for his drink, I have money in my account, I have no contact with cryptocurrencies. This is just a form of payment just like a card and a POS device,” he adds.

Exempting finances from intermediaries

It all started with the idea of ​​removing intermediaries, banks, and notaries from financial transactions.

Cryptocurrencies allow anonymous transactions that elude traditional ways of controlling financial transactions and for a long time, banks have stayed away from that. Throughout 2017 and 2018, there was a sharp rise in price and then a crash. Cryptocurrencies have lost 90 percent of their value and this was another confirmation that cryptocurrencies will fail, that they make no sense. But it turned out through 2018, after they hit rock bottom, that the cryptocurrency industry has not failed, but investments have only intensified over time.

Ethereum is becoming a programming platform and decentralized financing is currently being worked on the most. It can be used to obtain loans without the existence of a third party, such as a bank. Credit is obtained from a group of people who do not know who you are or where you are.

Leave your cryptocurrency as a deposit, which you would otherwise save, for example, and you can get a loan based on it. These are now things that have been popping up for the last year or two and have been extremely popular lately. That decentralized financing or DeFi is growing very fast, 

It is sure that we cannot know what all this industry will come up with and what kind of future awaits us, even in the second half of this year.

The Chinese attack on cryptocurrencies and their decline in value has nevertheless worried those who trade them on a daily basis.

For long-term investors, this is one of the expected and natural declines, they still believe that the future of the strongest cryptocurrencies is guaranteed.

By: Nitza – Gossip Whispers

Discover

Sponsor

spot_imgspot_img

Latest