In our world today, we are at that point where technology has made financial activities seamless for us, ranging from financial payments to financial transactions.
Everything can be done online, literally from the comfort of our homes, with just the press of a button. Cryptocurrencies have also stepped in to change the way we see money and to serve as a serious threat to traditional institutions.
Fortunately, positive technology cannot be rejected forever, as more and more countries continue to accept cryptocurrencies, which means the faster the world adapts to a new technological change.
What are Cryptocurrency and Blockchain?
Cryptocurrencies are digital tokens used for carrying out financial transactions. Basically, these tokens can be referred to as digital money with no physical layout but are more efficient in every way than regular fiat.
Blockchain, on the other hand, is a foundation for cryptocurrency transactions. It serves as the building block for all cryptocurrencies, interconnecting their data transactions into a network. You could think of a blockchain as the foundation or layout upon which crypto is built.
As such, what this means is that major cryptocurrencies have their own personal blockchains, such as the Cardano blockchain, the Ethereum blockchain, and the Bitcoin blockchain.
Always have it at the back of your mind that cryptocurrencies and blockchain are in no way one and the same as they were built for different purposes.
Presently, there are over 8,000 cryptocurrencies, and more are being added to the crypto market each passing day. Also, there are about 300 million people in the world actively using cryptocurrencies in their day-to-day activities.
This might seem like a minute figure, especially when compared to the world’s total population of over 7.5 billion people. But let’s not forget that while the numbers seem small, cryptocurrencies have indeed come a long way, despite the fact that the tokens remain heavily unregulated.
Many critics frown at its activities claim that, due to its non-regulation, it has been used as a perfect conduit for money laundering and fraud by financial criminals.
Nonetheless, despite this, and the recent downward performance of the crypto market, proving that though unregulated, it still suffers from shocks and setbacks just like the traditional stock exchange market, investors across the world have continued to show massive interest in it.
What this means for us and for our future is that since what we classify as money is backed by the people’s faith in it, a heavy backing by investors worldwide would leave regulatory bodies across the world no choice but to accept it as legal tender and as a means for payment and exchange.
Also possible is the erasure of physical fiat, as people will no longer need to carry money around and the payment and transaction processes will be greatly simplified.
This will, of course, lead to the erasure of some financial establishments, but again, with new technological inventions comes to the phasing/erasure of previously existing ones. A price we have to pay for the advancement of mankind.
The benefits of crypto and blockchain in the near future
Well-known analyst, Avivah Litan, recently made a prediction that successful cryptocurrency thefts and ransomware payments will drop by 30% in about three years from now.
She also went on to state that investors will begin to massively adopt crypto as a form of hedge against ever-rising inflation and as a preferred asset to gold.
To add to that, world governments will also establish structures for cryptocurrencies, perhaps in a bid to regulate them and understand their market trends and movements.
Taxation is also another important concept that governments around the world plan to look into, as part of the reasons why cryptocurrencies were frowned upon by some governments in the first place was the inability for these tokens to be taxed, revenue that would be very beneficial to them in the long run.
This can be seen in a country like India, where it continues to figure out how to tax cryptocurrencies as the country develops a bank for cryptocurrencies.
If cryptocurrencies were to be accepted even faster, the scams and misuse of them would have to be curbed drastically, and this has been predicted to fall by 30% due to the inability of hackers to move these tokens off of their blockchain network.
This would definitely be a welcome situation for us in the future, especially when we take a look at the present statistics of how crypto scams hit $14 billion in 2021, up from $7.8 billion the previous year, according to research from Chainalysis.
Speaking of blockchain, it is expected that blockchains will promote customer loyalty reward programs. This would be a major benefit considering that, for years, customers have faced dissatisfaction with customer rewards as they are faced with so many constraints.
Most of the time, these customers earn points or rewards for a large purchase, and when they try to redeem them for an extra free product or a discount, they are met with so many constraints such as terms and conditions, market policies, etc. This leaves them with regret, and in turn, they lose faith in them.
Blockchain, however, is said to change that as retail outlets are gradually integrating the blockchain technology to enable them to manage transactions, provide solid reward programs, and ensure that there is constant transparency, flexibility, and efficiency as customers benefit from these reward programs.
One other benefit the blockchain could bring in the future is the metaverse. The metaverse is a next-level virtual reality world where individuals can work, play, learn, and do other activities they would normally do in the real world.
This concept generally brings about doubts and fear in some quarters, but let us remember that with every new technology comes to some negativity led by some individuals surrounding it. After all, the internet we all know and use today came with its own set of criticisms, but today, it has been of immense benefit to us.