What is a cryptocurrency?

Let’s start with the basics and define what is a cryptocurrency. The word cryptocurrency refers to a type of currency fully online which uses digital files as money. Cryptocurrencies use decentralized control, which means that they are not controlled by one person or government.

Bitcoin, also known as BTC, is the most known and valuable cryptocurrency nowadays. To keep it simple, each Bitcoin is a computer file stored in a ‘digital wallet’ on a smartphone or computer. Bitcoin users can send more or less the quantity of a Bitcoin to other users. Every single transaction is recorded in a public list called the blockchain. This makes it possible to trace and keep a record of transactions in order to protect the users. 

Another cryptocurrency highly mediatized these last months was Dogecoin, for which Elon Musk gave a lot of attention.   

Indeed, Elon Musk, CEO of Tesla and SpaceX, currently the world’s richest person, brought the light on Dogecoin through his twitter. His recent tweets and jokes showed his interest for Dogecoin “Doge spelled backwards is Egod” (Elon Musk March 5, 2021). He also did not hide his disinterest for Bitcoin “BTC (Bitcoin) is an anagram of TBC(The Boring Company) What a coincidence!” (Elon Musk March 12, 2021).

But, why do cryptocurrencies attract attention?

Cryptocurrencies have many advantages and each cryptocurrency is different from one another. Bitcoin for example is accessible, discreet and autonomous. Bitcoin has no banking fees and low international transaction fees. 

Moreover, unlike bank money, a Bitcoin user truly owns his money and is not affected by a higher supervision. Which means that a user can do what he pleases with his money, but let us not forget that all the transactions are recorded into the blockchain and can be tracked in case of any criminal relation

In addition, the amount of Bitcoin being limited to 21 millions, it could become resistant to inflation if adopted as the main currency.

Whereas, cryptocurrencies have disadvantages. First of all, those currencies are based online, and the risk of cyber attacks is low but omnipresent. Moreover, there are almost no regulations which means for now that the price is also volatile and has a lack of inherent value. By the lack of institutions it would also be impossible to borrow money. At last, cryptocurrencies are not yet recognized as a currency of exchange which make it difficult to find a store willing to accept Bitcoin (or any cryptocurrencies).

Also, cryptocurrencies are unstable and venerable to hacking situations, server crashes.

Will cryptocurrencies become mainstream?

Yes, the situation has a high probability to happen and the covid crisis could even have accelerated the process to switch our actual currency to crypto.

Indeed, with the actual crisis, it is quite possible that our world will experience high inflation in the next years to come due to the closing of a lot of businesses. By this fact, the instability of our currency could be exposed and probably enlight even more cryptocurrencies.

Nowadays, cryptocurrencies are mostly used as investment due to the high fluctuations. However, if more and more businesses begin to accept cryptocurrencies, cryptocurrencies can start stabilizing.

With time, disadvantages of cryptocurrencies can be fixed and then a switch of currency can slowly happen.

But which cryptocurrency could be our main currency?

A lot of crypto currencies exist and the debate is between which one is best. We can in fact find more than 4,000 crypto currencies.

“In short, there are over 4,000 as early 2021 – a severe increase from just a handful of digital coins in 2013.” (Raynor de Best, Feb 15, 2021)

The fact is that anyone can create his own digital currency, because those digital money are only files and have value only because of people’s opinion. Bitcoin and other cryptocurrencies are valuable only because people believe they are such as gold, diamond, etc.

Only a handful of them are trustworthy. A cryptocurrency can only be worth investing, if coins cannot be created by anyone or be stolen. It has to be independent and have a blockchain. For example some cryptocurrencies worth to take a look at are: Bitcoin (BTC), DogeCoin (DOGE), Ethereum (ETH), Litecoin (LTC), Binance coin (BNB), Tron (TRX).

Today, cryptocurrencies are considered dangerous, too risky by most people because of the instability and issues related to corrupted files, hacking, and servers crashing. However, our actual currency was not created in one day and had a lot of issues at the beginning.

Cryptocurrencies won’t replace our currency tomorrow but we could see in the future, the best of cryptomoney become mainstream or even have multiple cryptocurrencies at the same time. The question is still to be decided.