The Future of Crypto-Currency and Issues Related to It
The regulatory response to the rise of Crypto-currency has not been uniform. It varies significantly across jurisdictions. Some have banned the use of digital currencies, while Germany and the United States have introduced limited forms of regulation. But overall, more jurisdictions are taking a wait-and-see approach, or even remaining silent. So, what is the future of crypto-currency? And how do we get there?
Stablecoins
The first issue related to stablecoins is their role as collateral for leveraged trading in other crypto assets. If the price of a stablecoin falls, two consequences occur: the issuer must sell the assets that backed it and the retail investor may need to liquidate their balance sheet in order to meet margin requirements. These concerns should not be dismissed out of hand, however, as they are very real.
Bitcoin
As cryptocurrencies gain in popularity, there has been a corresponding rise in interest in cryptocurrency markets. However, the popularity of cryptocurrencies appears more speculative and related to profit than to their function as a payment system. As a result, the prices of many cryptocurrencies have been volatile. For example, the price of Bitcoin soared to almost US$70,000 in mid-2021, before crashing back to about US$30,000 in early 2022. This price volatility has extended to rival cryptocurrencies.
Bitcoin Cash
While the Bitcoin blockchain is decentralized, the majority of banks have expressed interest in using decentralized cryptocurrencies, such as Bitcoin Cash. They are interested in the speed of transaction processing and the low transaction fees. The Bitcoin Cash fork, which forked from Bitcoin in 2017, has both advantages and disadvantages. Some financial institutions are hesitant to use it, however, because it might cannibalize their existing businesses.
Litecoin
Unlike traditional currencies, Litecoin functions without a central bank or financial institution. Instead, it relies on blockchain technology to process transactions. Transactions are verified by miners who use their immense computing power to solve complex mathematical problems. These miners are compensated with Litecoin. PayPal Holdings launched Litecoin in 2020. The currency has been criticized for its slow block propagation times and lack of a value proposition, but the currency’s blockchain has been proven secure against attacks that can reduce its prices.
Ripple
Ripple and issues related to it have generated a lot of buzz in recent months. This cryptocurrency has huge potential, but it is also hampered by high-profile issues, such as the SEC’s suit against the company. The SEC plans to file its suit against Ripple by the end of 2020. To understand Ripple’s potential and issues related to it, you should be aware of the company’s past and present.
Ethereum Classic
While the blockchain’s price is up and down, the Ethereum Classic project has continued to upgrade itself, aiming to be a global payment network using smart contracts without centralized governance. The project will also likely continue to strive to be a digital store of value, with the ability to convert purchasing power into cash or another asset. With a limited supply, it may not be easy to get enough Ethereum Classic to make it a mainstream currency.
Stellar Lumens
This article discusses the Stellar Lumens (XLM) currency and the issues related to it. It explains the way the currency works. Lumens can be changed into several different currencies. When sending a currency, the network first checks whether it is a straight exchange or if there is a demand for the initial currency from the other party. After that, the network searches for other Lumens to convert to the desired currency.
