Before you dive into the world of cryptocurrency, you have to understand how money works. Earlier money was printed as per the amount of gold in the vault. Because gold is considered a precious metal.
But then the rule was changed and now money can be printed as per the ruling financial bodies decision.
So they print the money and distribute it. The more they print, the less value it holds in the international transaction. So there is an upper cap. And now whatever money exists is exchanged by buying and selling process. You trust that this paper money is backed by the bank or government. There is a belief.
You can do the same with cryptocurrency. And you don’t need the government to make you believe.
If tomorrow all of you stopped believing in the paper currency then you can go to the government to give you something.
But in cryptocurrency, all you have is the belief. There is no government backing you up. A cryptocurrency survives because it is peer to peer. All of you believe in it and it works like magic. As the paper money, there is an upper cap to the cryptocurrency.
Bitcoin is one of the cryptocurrency. And it got its fame because of its high price. Many people invested in bitcoin and because of the huge demand it’s price got too much high. Then the initial investor started selling the bitcoin while the new entrants were buying them hoping to sell it higher.
But bitcoin had already reached its height of value in today’s currency. So the people who bought it after the high price are regretting and don’t like anything to do with cryptocurrency.
You can trade bitcoin like you trade currencies but it isn’t its main function. You probably have a few currencies with you now – the way you think about it is how you can buy bread and other stuff. And not to sell it and get some other currency is return.
Bitcoin and other cryptocurrencies shouldn’t be used as an investment strategy although there will come some huge price fluctuation. But it will cool down once enough users or the majority of the population is using it.
You don’t have to enter into bitcoin because it will give you huge returns on your money. Instead, you should use bitcoin because in theory and soon in practice it is better than your paper money now.
In a nutshell, think of bitcoin as dollar or euro and you will soon find that it is a revolution on how you buy, sell and transfer the money.
You need more cryptocurrency because there are different blockchain technology being used. And thus it is like a different programming language. You use the ones which best suit the current need.
But there has to be a dominant cryptocurrency which fulfills the role of the current paper currency so that it can be adopted by all. And boom, you will get your salary in cryptocurrency, you will buy things in the same and thus there will be a proper circulation.
The best thing is everything is publicly recorded so there will be a mark for everything that is involved. Thus less corruption and maybe that’s why many governments are opposing this technology. Because it might expose their questionable funding and support.
Since money is power, how it has to used and recorded is in the hands of the government. And thus they can exploit you without you even knowing about it.
So there is a need to have the cryptocurrency movement so the transaction is peer to peer and no government body can influence it. Also, everything will be in white and there will no black money which people can use.
This is an uphill battle. Until then you need to improve the technology, work on the awareness so that it gets adopted slowly and brings out the revolution which is needed.
Again reminder – don’t use the cryptocurrency as an investment option, it isn’t. It is a currency like any other.