Cryptocurrency is a digital currency that uses a type of encryption algorithm for carrying out processes like conducting transactions and generating coins. It does not have any physical representation and is not regulated by any financial or government body. The full transaction is conducted online.
Bitcoin is the 1st currency that was developed way back in 2009, and all other coins that were developed later on came to be known as alternate coins or, more simply, Altcoins. The major driving forces for cryptocurrencies are the fluctuations in the monetary regulations, the high rate of remittances in the developing countries, and the growth of venture capital investments.
Share of Cryptocurrency Market and Its Volatility
The cryptocurrencies, based on type, are classified as Bitcoin and Altcoins. It is expected that Bitcoin will have the largest market share, and the present high growth of cryptocurrencies is governed by hopes that Bitcoin will be the next digital gold and would help to reshape industries. It is estimated that Asia-Pacific or APAC has the largest share of the Cryptocurrency market, followed by Europe. China, Japan, the UK, and Germany are said to be the most important markets for Bitcoins and Altcoins.
It is important to note that, like securities in the traditional markets, the price of the cryptocurrencies are governed by the law of supply and demand. It is one of the significant factors which determines the ups and downs of Bitcoin and other cryptocurrencies. Also, since the market for cryptocurrencies is very small compared to the traditional currency markets, the volatility is even more.
An Overview of the Defi Adoption by the Younger Generation
The present global financial system has proved to be quite inefficient in various aspects. The users face many security risks as several financial intermediaries are present in this system. The increasing number of cybercrimes leaves the people at risk of data exploitation. Also, the current financial system restricts millions of people from all kinds of financial services due to barriers such as location, status, and wealth.
A Decentralized Financial System or Defi is more appealing to the consumers, especially the younger generations. This system, based on a public blockchain, would allow access to financial services for everyone irrespective of location and status. An increasing number of startups and companies have realized the importance of open-source networks to decentralize economic activities. Since blockchain is permissionless, anyone in the world can connect to this. The high level of accessibility on a global platform would solve all issues of inequality that the present financial system poses. Again, blockchain is decentralized, which means that the records are scattered across thousands of devices, and there is no centralized server that has full control of the blockchain. Lastly, the blockchain technology is fully transparent as every record is auditable by the public.
Many companies have understood the potential of blockchain technology and are shifting towards this new sector. No wonder, financial experts believe that blockchain solutions will genuinely revolutionize the financial system.
The Future of Bitcoin
The Europeans are optimistic about the positive future of Bitcoin. Recent studies have shown that experts believe that cryptocurrencies like Bitcoin will exist in 10 years and become a part of the economy. Alexis Ohanian, the co-founder of Reddit, is an avid investor in various Blockchain projects. He is very bullish on the concept of Bitcoin, and he believes that by the end of this year (2020), Bitcoin will recover from the present slump and gain an upward trajectory. Experts like him think that by the end of the year, Bitcoin will be at a staggering $20,000.