The Cryptocurrency market is on an upswing and is predicted that within 4 to 5 years the crypto market would be worth USD 1 trillion.
But the value of Cryptocurrencies is subject to high fluctuations, leaving investors with huge risks and losses. The unpredictability of it all and the repelling effect of cryptocurrencies can be understood if we take a glance at the statistics over the last 3 years:
- In 2017 it rose from 1000 USD to a whopping 17000 USD
- In early 2019 it plummeted to 3000 USD
- In the same year i.e. 2019, it went back again as high as 10000 USD
Where does the name Cryptocurrency come from?
The term “crypto” here comes from cryptography which is meant to secure a transaction with a key. Without the key, the encoded material cannot be decoded.
In the context of Cryptocurrencies, it means currencies that are virtual or digital in nature, and the transactions involving such currencies are secured and verified by means of cryptography.
Blockchain technology is used to make Cryptocurrencies which mainly refers to the decentralization of stored data. Using Blockchain technology the coded Cryptocurrencies cannot be tracked. By virtue of this property, Cryptocurrencies are rendered useful for investments.
Cryptocurrency has universal appeal
No single country has any authority on Cryptocurrency. This fact has made some people doubt the credibility of this currency. But there is another sector of people who realize how Cryptocurrencies can be hugely profitable.
In the US and European countries, Cryptocurrencies are still considered as something novel and its capacity is still unearthed. As they are still a mystery to most countries they are hesitant in taking any concrete decision about evaluating Cryptocurrencies.
But cryptocurrencies are an apt alternative to fiat currencies and are safe.
What do the governments feel about Cryptocurrencies?
Though many organizations and institutions are in support of Cryptocurrencies, the central bank and government have refrained from giving any official response. Since these currencies are highly volatile, the bank and government are still mulling over the prospect and future of Cryptocurrencies.
Let us see what government of few countries has to say about Cryptocurrencies:
U.S Federal Reserve
Jerome Powel is the chairman of Federal Reserve and feels unless all the technological and management issues of Cryptocurrencies are resolved; they cannot be introduced in the mainstream currencies.
European Central Bank
By comparing Cryptocurrencies with the flower “Tulip” (a flower with short life), the former vice president of the European central bank has very well expressed that Cryptocurrencies hold no value in European countries.
People’s Bank of China
China has a different view about it and feels that if the government has full control over Cryptocurrencies then they can be taken to the next level.
Bank of Japan
For the government of Japan, there is no prospect for the Cryptocurrencies market.
Bank of England
According to the governor of Bank of England, Cryptocurrencies are a kind of revolution. He also feels that the government should own the technology which makes Cryptocurrencies.
Cryptocurrencies are fast and secure with minimal transactional costs. They are suitable to be used as an investment, just like gold and silver. But it is also true that your profits are directly proportional to the risks. So a wise step would be to carefully analyze the market before delving into Cryptocurrencies.