Over the last few months, you may have heard the phrase Bitcoin more frequently online and in the news. Most people have heard of Bitcoin but not many know what it actually is. Bitcoin is a cryptocurrency, or online currency, which only exists online. It is decentralised, which means that it is not controlled by the government or state. The value of Bitcoin has hit some record highs recently, which is the main reason it has been so frequently mentioned in the news. Despite this, there is no way to tell whether decentralised currencies will remain valuable in the future, and it is predicted that Bitcoin could crash as quickly as it became popular. So, what will follow Bitcoin?
There are many other cryptocurrencies available online. If the value of Bitcoin crashes, it is likely that another will quickly take its place. Cryptocurrency can be mined online which, to put a complex process simply, is where people can use their computers to earn money in the form of Bitcoin. But mining Bitcoin from your home computer is no longer profitable and you will need to invest in some custom hardware in order to make the process cost effective again.
This is the reason for other cryptocurrencies becoming more popular; some are still able to be mined without the use of custom software. An example of another popular cryptocurrency is Primecoin. Users can set up mining for Primecoin in a cloud storage program, which means it does not need to run a lot of servers on your home computer or laptop.
Ethereum is a technical evolution of Bitcoin, so it could gain popularity if Bitcoin crashes. One of the appeals of Ethereum is that it is easier to make contracts than other online currencies. The value of Ethereum has been unstable, and it is currently valued at less than Bitcoin, but the value has surged by 20% recently which could be a continuing trend in the future.
Ripple, also known as XRP, is a network which enables low-cost international payments. It enables money to be transferred between people around the world. It aims to keep money flowing freely. Ripple is run centrally, unlike Bitcoin, which means that it is a controlled currency. Ripple is currently used in banks around the world because it offers a quicker method for transferring currency. It has seen a steady growth in value, which has earned it a place in the top fifteen online currencies. Whether Ripple is a suitable contender to replace Bitcoin is debatable, it actually sets itself up as a complement to Bitcoin instead of a competitor. Ripple could be a way of establishing the connection between Bitcoin and mainstream finance.
These are just some of the alternative cryptocurrencies available but there are many more. It is difficult to predict whether they will ever gain as much popularity and value as Bitcoin has.
Less Centralised Technology
One of the most revolutionary elements of Bitcoin, and other cryptocurrencies, is the technology that has made it possible. Bitcoin has already made a significant impact on current technology, it has changed the way people play video games. In the future, we could see this decentralised technology being utilised in other ways. For example, banks could move towards keeping shared databases to enable them to check their records. This would be far more efficient and could save a large amount of money.
Money Is Not Going Anywhere
Although cash transactions have reduced, because of the rising popularity of contactless payments and mobile applications, it not likely that cash will be phased out any time soon. Cash is convenient, it is not easily traceable and it remains one of the most popular ways for people to make payments. Despite wide speculation, a world where we only use cryptocurrency is still a long way off.
To sum up, the future is uncertain. We could see another cryptocurrency, such as Ethereum or Primecoin becoming popular. These online currencies have a higher potential for individuals to make money from them, although eventually they could end up in the same unstable financial position as Bitcoin. It is likely that revolutionary technology which has enabled Bitcoin to take off will be utilised in other industries, particularly in banking.