Although you could find the word 'Bitcoin' almost weekly on front pages of newspapers in 2018, it remained frighteningly silent in 2019 around this (and many other) crypto currencies. And when there was news, it was mainly bad news, such as the cesspool of problems surrounding the launch of Facebook's own cryptocurrency, Libra. For the average Dutch person, it may seem that crypto currencies are on their way back, but is that image correct? Do crypto currencies still have a future?
From hype to being part of society
If we open the history books (probably e-books) to read about crypto currency in decades, its emergence around 2017 and 2018 will be portrayed as a typical example of a social hype. All the characteristics were there: the Bitcoin rate rose in no time from a few hundred dollars to twenty thousand (!!) dollars each, but also plummeted just as quickly. The Bitcoin was everywhere and all sorts of consumers who had no idea what blockchain means and who had never speculated on the foreign exchange market suddenly became proud owners of a stock of Bitcoin.
That situation could not continue and 2019 has proven that. Numerous crypto currencies were killed last year and many new initiatives, such as the Libra, have not (yet) got off the ground. That may seem like bad news, but it is important to realize that crypto currencies have by no means disappeared and that there are countless innovations and developments in that domain. Crypto currencies are not awayBut the market is sticking to it stabilize. That means that the hype is over and crypto currency can slowly become a part of society, and that has major advantages.
Purpose of crypto currency
Like a hype dies, this often has one important cause: the product does not serve an autonomous purpose. Everyone simply wants it, but after all, the product is useless. Think of the flippo, or the Tamagotchi, or the smartphone with Flappy Bird on it.
Crypto currency seemed to face such a fate for a long time. The purpose for which they were there (being able to pay without a bank account, being able to conduct anonymous money transactions) was not a reason for the majority of people to bring them home. No, they 'just' wanted to earn money quickly. Speculate on a price rise. And although demand is growing and the rate is indeed rising, it is a castle built on quicksand. As soon as confidence shrinks, the demand is immediately gone because the product does not meet an actual need. But that will slowly change in 2020.
Regulation, cleaning andhalving '
After all, central banks and other government institutions have been working at global level for some time on more regulation and regulation in the field of crypto currency. And although that sounds contradictory - because of it buy from Bitcoin on the contrary, could you pay anonymously anonymously from a bank? - that's probably good news. To the right extent, regulation ensures more safety and reliability.
In that context, it is also good that so many shadowy crypto currencies have been exposed or disappeared in recent months. In the end, the consumer benefits from a market that can in principle be trusted. An image as a 'black market means of payment' does not help then. The range of currencies has shrunk, but the currencies that remain are, on average, of high quality.
What's more, that's it minen of new Bitcoin will become less profitable in the coming year because the process will take twice as long. This phenomenon is called halving and will in any case ensure that Bitcoin's price will get a boost - after all, the increase in supply is decreasing.
If regulation and cleaning work out well and no new excesses are added, crypto currencies will effortlessly be able to assume a useful position in society. An accessible platform on which money transactions are possible even without a bank account (and there are still 1.7 billion people worldwide who do not have one) and without the intervention of agencies that want to get their share. The hype is then over and the social interest born. Speculating on spectacular price fluctuations is then much less exciting, but maybe that is even better.