Can cryptocurrencies based on blockchain technology compete with government currencies? Although the facts are not always obvious in Western countries, government currencies depend on government stability. In the long run, investing in cryptocurrencies is possible, but can it be used as a currency of the transaction? We are worth looking forward to.

What is cryptocurrency?

The so -called use of cryptography to cast virtual coins, cryptocurrencies are usually exchanged between people with virtual wallets on decentralized computer networks. These transactions are publicly recorded on distributed tampered and modified accounts called blockchain. This open source framework can prevent coins from being copied and do not need to verify transactions like a bank like a bank. Bitcoin was founded in 2009 by Bitcoin, a software engineer, and is the most famous cryptocurrency so far. Its total value sometimes exceeds $ 1 trillion. However, in recent years, many other projects including the second popular Ethereum have surged and operated in accordance with the same general principles.

Cryptocurrency users send funds between digital wallet addresses. Then record these transactions to the "block" and confirm it through the network. The blockchain does not record the real name or the actual address, only the transfer between the digital wallets, thereby giving users a certain degree of anonymity. Some cryptocurrencies, such as Monero, claim to provide additional privacy. However, if you know the identity of the wallet owner, they can track their transactions.

Bitcoin "miners" earn coins by verifying transactions on the network. This process requires them to use computers to guess and check the trillions of possible solutions to solve mathematical issues, which is called "workload certificate". Many cryptocurrencies use this method, but some cryptocurrencies use the verification mechanism called "equity certificate". In the example of Bitcoin, a transaction block is added to the chain every ten minutes, and the new Bitcoin is granted at this time. (The reward has steadily declined over time.) The total supply of Bitcoin is 21 million, but not all cryptocurrencies have such restrictions.

The price of Bitcoin and many other cryptocurrencies varies from global supply and demand. However, the value of some cryptocurrencies is fixed because they have other asset support, so they are called "stablecoins". For example, the value of popular stable currency Tether and USD Coin is said to be $ 1 per coin, but the authorities claim that the situation is not always the case.

How to confirm cryptocurrency transactions?

Cryptocurrencies are composed of a point network, and each point has a list of all the transactions in the past. Any transmission in the network is signed by the sender's private key, and then the broadcast message is sent to the network. After a certain time, it will be confirmed. Once the transaction is confirmed, it is fixed, and it is irrevocable or changed in any case.

The work of miners in the network is to confirm these transactions. The mining program was notified, marked and sent back to the network. Once confirmed, each node will add entries to their database, and it becomes part of the blockchain.

Can cryptocurrencies become mainstream currencies?

Many people believe that cryptocurrencies can become mainstream currencies. Most places are set up to be paid by debt and credit card forms from merchants and customers. It is not important how the agreed balance is transferred. From the perspective of technology implementation, the current system relies on banks' centralized systems to transfer funds from customer accounts to merchant accounts. This can easily change to the use of decentralized blockchain to transfer money from the customer's wallet to the merchant's wallet. You can get some cards from the cryptocurrency exchange to allow you to "pay with cryptocurrencies". However, it is actually selling cryptocurrencies to you with the current market exchange rate of the US dollar and then paying it with it. This is usually not a good idea, because in addition to the total cost of the transaction itself, you must also pay the cryptocurrency to pay taxes to the US dollar. But this is just a regulatory issue that can change. Both Salvador and the Chinese and African Republic have set Bitcoin as official currencies, and the United States, China and Russia are researching or testing their own digital currencies.

Perhaps they should not be one of the mainstream reasons is one of the main reasons for their popularity, that is, privacy. Although the encrypted wallet is not open to someone's identity, if they are used for your daily shopping, you can know others according to the shopping model. For example, if I know that you and your spouse eat at a specific restaurant around 7 pm on Friday, I can find all transactions to that restaurant before and after that time. These transactions are reasonable for two people. Considering these possibilities, it is easy to narrow the range -as long as one or two detailed information about one person can be easily found online. Then you will know each transaction sent by that person, who they send them to, and how much they are currently in their accounts.

Is cryptocurrency be useful under national emergency?

As far as natural disasters are concerned, it is not as useful as the current system. Like the current digital payment system, it requires power supply and Internet connection. When those lack of cash, cash is king. However, it may be useful in financial emergencies. If a country's currency is trapped or restricted for some reason, citizens will have other available transactions.

Where can cryptocurrencies be suitable for creating currencies, especially in places with political uncertainty?

In recent years, the newly created new Tariff Currency has exploded. Study these encrypted token terms is token economics, which brings many proposals and implementation of many new economic systems that have never been tried before. The value of most tokens has never increased to nearly one beauty. But some are indeed successful and may become the next big event, such as Bitcoin or Ethereum.

Unlike the current currency controlled by central institutions such as the United States, cryptocurrencies are controlled by defining their code. This code can be changed to provide updates and new features. For example, Ethereum recently switched to proof of stake, but provided that most node operators agreed to change the code they used. Therefore, if a country is affected by political instability, this may lead to problems with the traditional central authorities, and constantly changing political leaders may not make any changes to cryptocurrencies -especially if it is also used internationally, it is also used internationally. And there is a node operator border outside their own country.

Cryptocurrencies have a strong attraction among minority groups and young people.

Americans also regard cryptocurrencies as a means to create a more fair economy.

Among the people who were investigated, the American Black (31%) and the Spanish Americans (38%) were more likely to have cryptocurrencies than White (16%), about one-third (37%) 18-34 years old Registration voters have cryptocurrencies. It is important that more than half of adults (56%) said that financial innovation relying on bank/financial intermediaries (such as cryptocurrencies) will create a more fair economy. This public opinion survey shows that many people believe that cryptocurrencies are a way to a fair financial system to the United States, and decision makers should realize this when considering the supervision of cryptocurrencies in their legislative agenda.

What are the future of cryptocurrencies?

It is necessary to predict the future scene of cryptocurrencies, consider what happened in the past and clarify that several key points may be useful. First, the world of blockchain consists of cryptocurrencies and crypto derivatives. For example, Bitcoin is a cryptocurrency, while the stablecoin Tether and Terrausd are cryptocurrency derivatives. These are "derivatives" from cryptocurrencies and/or linked currencies that are widely recognized and concentrated, such as the US dollar. In short, financial investors hand over the US dollar to the company and obtain derivatives as returns. The company converted the US dollar with cryptocurrencies and lent it to global borrowers. At the same time, the company promised financial investors to convert derivatives into a fixed number of given cryptocurrencies on demand, which may be linked to the US dollar, or the dollar is backing.

As a result, if you buy Bitcoin or other cryptocurrencies, your win -win depends on the exchange rate of cryptocurrencies in your investment portfolio. However, if you buy derivatives, you may find that it does not really get enough cryptocurrency support, or at least it can be said that the US dollar exchange guarantee is full of loopholes. If so, the derivative products are almost worthless. This is the situation of several cryptocurrency derivatives that have occurred over the past few months. Companies that issue such products are very active in the market and lead to the fluctuations in the target assets, especially if they promise to provide considerable returns, which will increase the demand for cryptocurrencies and crypto derivatives. If the mortgage of derivatives is insufficient, investors will be scared away during economic downturn.

The second key point is that cryptocurrencies are currently considered to be a speculative tool and a wealth storage method, not a payment method for ordinary transactions. For example, more than 60% of the total Bitcoin in circulation is stored in each account ("wallet"), and the number of Bitcoin exceeds 100. In addition to adjusting the investment portfolio, it rarely trades in the market: 2022 in 2022: in 2022 In late July, only about 250,000 Bitcoin trades daily, and it is likely that only a small part of it is related to commercial transactions. In addition, cryptocurrency holders seem to have a long -term vision. For example, "shrimp" and "whale" (accounts with less than 1 and more than 1,000 bitcoin respectively) use the recent selling a large number of buying.

The three preliminary conclusions are as follows: (1) The long -term practice of typical cryptocurrency holders shows that cryptocurrency projects are not easily killed and survived in severe fluctuations; (2) fluctuations are driven by encrypted derivatives. The event was amplified due to the relatively few cryptocurrencies in the market; (3) the collapse of the cryptocurrency market in 2022 hit the world of derivatives. It may be possible Cryptocurrency investors provide opportunities to eliminate the main sources of fluctuations.

The future of cryptocurrencies

Over the years, people have observed that cryptocurrencies have high volatility and composition, especially Bitcoin. This fluctuation mainly depends on the decision of U.S. financial regulatory agencies in Bitcoin. However, the future of Bitcoin can be summarized as follows--

As it is becoming more and more popular, Bitcoin users predict that by 2024, almost 94% of different types of Bitcoin will be released.

Snapchat's first investor Jeremy Liew predicts that Bitcoin will reach an amazing $ 500,000 by 2030.

The popularity of this form of currency is expected to grow in index level because it is decentralized, safe and anonymous.

A large number of proficient individuals and companies support the decision to use different forms of cryptocurrencies to clearly indicate that the future of Bitcoin or the entire cryptocurrency will be bright.

However, it is predicted that the profits obtained by the creation of new blocks will be reduced to negligible. Cryptocurrencies are only in the initial stage, so it is now determined that whether cryptocurrencies will become the future of currency or Bitcoin will have any impact on the next few years.

The above content simply discusses the future trends and trends of cryptocurrencies. Cryptocurrencies have caught the public's attention, but at present, cryptocurrencies are not feasible trading currencies. The anonymity provided on the surface makes them attractive to illegal and illegal transactions, but from a social perspective, this is not a desirable result. At present, the main attraction of cryptocurrencies is as a speculative asset, although it shows great volatility. In the future, can cryptocurrencies become mainstream currencies? It may first solve the huge power demand of cryptocurrency mining to avoid environmental consequences.