Adoption of Cryptocurrencies

Blockchain, sometimes referred to as Distributed Ledger Technology (DLT), makes the history of any digital asset unalterable and transparent through the use of decentralization and cryptographic hashing.  Blockchain technology powers cryptocurrencies (crypto).

A crypto is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology — a distributed ledger enforced by a disparate network of computers.

The adoption of crypto has been changed in some major ways over the past year. The Covid-19 pandemic has accelerated the wider adoption of Bitcoin and crypto in general. From the beginning of 2020 to now, the price of Bitcoin increased by over seven times. A lot of cryptocurrencies have significantly outperformed FAIT currencies, like dollars, euros, and yuans over the last year.

There are more than 1000 cryptocurriencies at the present time. Apart from Bitcoin, some of the best known crypto are Ethereum, Litecoin, Tether, Libra, Monero, Binance, Cardona, VeChain, etc. Owning private digital coins and using hard wallets, which are encrypted and stored locally on one’s device, are very attractive ways to ensure one’s freedom and to maintain the highest levels of privacy and security.

More and more large institutions and Wall Street investors are slowly but surely pouring substantial liquidity into the digital coin. As well, more and more people with no bank accounts are buying cryptocurrencies like in India and Africa. Buying crypto are becoming easier with more platforms selling them, including PayPal, Coinbase, Binance, Robinwood, TradeStation, and so on.

Some governments, like China, Japan, Sweden, Estonia and others are looking at blockchain technology to develop its own cryptocurrencies. The Chinese government has launched their digital yuan which is different from crypto at the moment. When central banks around the world have their own cryptocurrencies, will you be willing to entrust your hard-earned money with centralized platforms who will decide how your crypto wallet and trading should be conducted?

While cryptocurrencies are digital, tamperproof, portable and programmable, they also have their own new challenges. For starters, they are non-productive assets. You still can’t pay for things you buy with crypto for the most part. They are unregulated and can be created by anybody and organization that have the capacity and resources. In addition, most central banks and commercial banks are resisting and opposing their adoption for fear of their own survival. There are therefore scalability, acceptance, protocol and governance issues for broad mainstream adoption. In addition to envision a smooth transmission and operation, this financial system needs to be ready to overcome any kind of electricity shutdown.

Is it time for you to take a serious look at investing in these relatively new class of non-productive assets that currently appreciating in value?

Disclaimer: This is not an investment advice. FYI only.

Full disclosure: I own Bitcoin, Ethereum, Binance, Cardona, Ripple (XRP), VeChain and some other cryptocurrencies.