The question on the minds of entrepreneurs, investors, and often security-minded politicians themselves is “will cryptocurrencies ever replace gold?” As it turns out, however, the question should be “when,” not “if,” because it’s already a popular alternative to the aforementioned metal.
Bitcoin is an innovative currency that has been called the gold of the internet for some time now. No wonder, it’s a currency independent of banks, governments, and other organizations that might mediate its exchange. Bitcoin can be sent literally anywhere on the globe where there is internet access, bypassing banks and middlemen, avoiding time limits, technological restrictions and of course costly commissions, which in the case of regular currency transactions often consume large sums of money
No wonder then that the described cryptocurrency, but also several other leading ones appearing in the rankings, obtain successive records of value. For example, ethereum, which in mid-April this year approached the amount of 2.5 thousand dollars!
Bitcoin and ethereum – the two biggest cryptocurrencies
We have already written a bit about Bitcoin, it is now worth citing the second cryptocurrency, which (according to analysts) may already this year overshadow the percentage growth of the former. Ethereum is different from Bitcoin, however, because it is a popular platform for building and creating decentralized applications or blockchain projects. There is no limited number of ethereum that can come into the market. Bitcoin can be traded on the open market or gain compensation for lending your computer’s processing power to the network. This is what differentiates the two cryptocurrencies, which, interestingly, are based on the same blockchain technology.
A way to inflationary processes
Cryptocurrencies in general are assets to store value, so they are ideal for times of major inflationary processes. This is the case with Bitcoin, which allows you to allocate capital in order to escape inflation. The situation is identical when we talk about gold, but it is a physical currency that has certain limitations, including when selling or buying – these processes are always fraught with risk. Bitcoin doesn’t have them, you can easily buy and sell it with a minimum of knowledge.
What about other cryptocurrencies?
According to the CEO of Geco.one (a digital cryptocurrency derivatives trading platform), among others, there is no chance that any other currencies will be a threat to Bitcoin and Ether, especially the former, which for many is a sure indicator of the entire cryptocurrency market. When Bitcoin rises to prominence, we talk about the entire market going through a boom, we equate it with all other cryptocurrencies, and for many uninitiated people, it is the only such currency they have heard of.
Even the data itself shows a significant advantage of Bitcoin and Ether over the others, the capitalization of the former exceeds a trillion dollars, the latter nearly a quarter of a trillion dollars. Third place goes to Binance Coin, whose market capitalization exceeds “only” $72 billion.
Legal problems of Bitcoin and other cryptocurrencies
It seems that the only factor that can block the popularity and desire to acquire cryptocurrencies are financial institutions, such as central banks or even the U.S. Department of the Treasury, which will reportedly try to take the fight against money laundering in the cryptocurrency market. Among other things, it is expected to accuse several institutions of using digital assets for illegal purposes
However, if Bitcoin eventually stabilizes, as well as other cryptocurrencies, we can talk about it being not only a second gold, but also a substitute for real money. After all, already Elon Metheusk himself approved the possibility of paying with cryptocurrencies for his cars. Later, unfortunately, he canceled it, but in the coming years, other organizations may follow in his footsteps and also adopt this type of currency.