Cryptocurrency: Expectations vs. Reality

Due to its decentralized structure and practicality in online transactions, particularly about purchases made from online sellers of goods and services, cryptocurrency investing has grown in popularity.

I'm seeing a lot of people who have no idea what they're doing, who are incurring significant losses at first but then beating themselves up as if it were their fault, says professional trader and founder of Stellar Development Foundation Benjamin David.

Cryptocurrencies are digital assets that use encryption, or cryptography, as a form of security.

A number of the most recent cryptocurrencies can also be used to buy, trade, and carry out obligations or regulations for their owner.

Since they cannot be swapped for other goods, even gold, they have no intrinsic worth. Additionally, because a government agency does not produce them, they differ from conventional currency.

Currently, early adopters primarily use cryptocurrency. Of the 10 million people who own Bitcoin, about half do so exclusively as a digital currency investment.

Due to the effectiveness of fiat currency sponsored by the government, cryptocurrencies are not required in the long run. Many Bitcoin users only think about the benefits that might come from using a cryptocurrency. One of its key benefits is that it is simple to buy and sell on platforms for cryptocurrency exchanges like Swyftx. This makes it far more available than other types of money, and it also implies that users can profit from market fluctuations.

With the peer-to-peer financial transaction model, cryptocurrencies heralded a fresh wave of disruption in the financial industry. On several sites, expectations for cryptocurrencies in 2023 have been lowered due to the volatile nature of the cryptocurrency industry in 2022. The creation of the ZK solution ecosystem, on the other hand, was made possible in part because of the cryptocurrency market.

4 Cryptocurrency predictions for 2023:

1. Ethereum will surpass Bitcoin in market value:

The first prediction for 2023 is that Ethereum (ETH 0.02%) will achieve the impossibility of surpassing the market value of Bitcoin (BTC 0.05%), even if only for a very little period.

The fact that Bitcoin and Ethereum frequently exhibit strong correlations makes this forecast particularly challenging. Usually, the other follows the first when it rises or lowers. Digital currencies have seldom ever strayed from Bitcoin and moved by independent, fact-based news or data. However, with stocks in a bear market and a possible U.S. economic slump, we might see the beginnings of individualization in the Bitcoin industry

2. The two most-popular meme coins will lose another 50% of their value:

The first thing to note is that neither Shiba Inu nor Dogecoin are anything more than payment currencies, and payment coins are nothing special. If merchants agree, thousands of digital currencies can be used to pay for goods and services.

Furthermore, neither Dogecoin nor Shiba Inu provides anything that might be considered advantages or distinctions. Although some tokens may have large followings on social media, there is nothing distinctive about them that makes them stand out from other projects that provide actual usefulness.

3. Another major cryptocurrency  exchange will fail:

Even though the pieces of the puzzle are still being put together and everyone is presumed innocent until and unless proven guilty in a court of law, it appears that Sam Bankman-Fried, the creator of FTX, and his accomplices were responsible for one of the biggest financial scams in history.

When FTX, one of the biggest digital currency exchanges by trading volume, sought bankruptcy protection in November, the FTX Token (FTT -0.09%) basically lost all of its value and was made unusable. FTX went from tweeting about recently rented office space in Miami to requesting $9 billion in funding to avoid bankruptcy in under 48 hours. In the end, FTX's liquid assets weren't enough to cover its debts.

4. El Salvador will be forced  to give up its Bitcoin experiment:

It was planned that September 2021 would be the pinnacle of cryptocurrencies. El Salvador is the first nation to have accepted Bitcoin as legal tender and mandated that companies do the same. But less than 16 months after excited El Salvadoran President Nayib Bukele gave Bitcoin the thumbs up, it turned out to be a dismal failure.

To begin with, most El Salvadorians aren't interested in utilizing Bitcoin as a form of payment because many of them lack access to conventional banking institutions. In 2022, just 24.4% of El Salvadorians surveyed by the Jose Simeon Canas Central American University had used Bitcoin to make a payment. Furthermore, according to two-thirds of respondents, the Bitcoin deployment was unsuccessful.

Advantages of Cryptocurrency

1. Because cryptocurrency transactions are direct and do not go through a bank or credit card provider, it is easier for two parties to transfer money between them. 

2. Public or private keys and incentive programs like Proof of Work or Proof of Stake are used to secure all transfers.

3. The processing costs for the transfers are significantly lower than the exorbitant fees financial institutions charge for wire transfers.

4. Because the currency is introduced with a fixed value and is only available in a restricted number of places, an increase in demand would cause its value to rise to keep up with the market.

5. Because of its decentralized character, no institution or individual may have a monopoly over it.

Disadvantages of Cryptocurrency

. Although cryptocurrencies like Bitcoin purport to be anonymous, they really create a digital trail that the Federal Bureau of Investigation can decipher. Therefore, there is a chance that federal or government authorities will meddle in the financial dealings of regular individuals.  

.One of the biggest problems with cryptocurrencies is the absence of important transactional policies. Each cryptocurrency stock market or app has its own policies, but it can be said that the no refund or cancellation policy is the default position for transactions conducted in error across crypto wallets.

. Cyber assaults frequently target cryptocurrency exchanges, which could result in a permanent loss of your money.

. Some people don't believe it is safe to convert "real" money into Bitcoins because the value of cryptocurrencies like Bitcoins might fluctuate greatly.

Future of cryptocurrency

Future expectations for cryptocurrencies range widely. Bitcoin is anticipated to be worth more than $100,000 per unit. Additionally, the commodity markets will transition entirely to digital form. Trading and investing would have been simpler as a result. The exchanges will be entirely digitalized and decentralized. Only with the aid of cryptocurrencies is this practical. For businesses, liquidity is more essential than profitability. Companies are unable to pay their present liabilities as a result of the liquidity crisis. Future consumers will have easy access to financing, which will help microlending. Additionally, this improves financial inclusion in numerous nations around the world. Cryptocurrency is anticipated to address the issue of tax evasion as well.