There has been nothing so innovative and breakthrough in the world of finances than the introduction of cryptocurrencies and their overwhelming success. People have been investing in different digital currencies more and more eagerly in recent years. There were both rapid increases of currencies’ costs as well as their clashes. However, will Bitcoin and other currencies remain widely used in the future? We will try to discuss it in this article!
Why Cryptocurrencies Are Doomed To Fail
Just recently a number of experts, including Carl Icahn and Mark Carney, stated that current cryptocurrencies are unlikely to continue existing in the future and be widely used. Since cryptocurrencies such as Bitcoin are failing as a form of money and have shown clear signs of being a financial bubble. Nevertheless, some believe that the very blockchain technology could improve the financial system in the future.
Here are some precise reasons why cryptocurrencies are going to fail:
- uncertainty and volatility: the crypto market is highly volatile. modern Bitcoin market is extremely volatile. Bitcoin price can climb or fall too rapidly as a result of a news story;
- mining issues: the more Bitcoins exist, the harder it is to “mine” for new coins. Bitcoin network will not work without miners. Due to the high prices of mining hardware, it is almost impossible for an average person to join the Bitcoin mining community. That is why the main mining “horsepower” is concentrated in huge warehouses across China. The price of electricity also plays a big role in mining. Majority of the countries have expensive electricity so it is not even worth mining cryptocurrencies;
- distrust in cryptocurrencies by authoritative people and companies: Facebook does not allow to advertise anything connected to mining and cryptocurrencies. More and more large international companies reject to accept Bitcoin, for instance, instead of cash or credit card;
- lack of consistency in laws and regulations: in China, ICOs are forbidden while in certain US states to trade cryptocurrency one requires a license which is a rather costly affair. Moreover, there is no proper international regulation of this currency which creates more and more issues on the worldwide level.
To wrap it up, cryptocurrencies face an undetermined future. Many experts believe they will not last long, however, the technology underlying them will play a crucial role in the changes of the modern financial system. What is going to happen in the nearest future we will see ourselves. For now, it is important to consider all the risks and possibilities regarding different cryptocurrencies and make reasonable actions.