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When the first Bitcoin was mined by Satoshi Nakamoto in early 2009, the seismic potential of blockchain technology for the future of global finances was laid bare. The emergence of cryptocurrencies such as Bitcoin promised to revolutionise the financial system, decentralising markets away from the big banks and shifting control to everyday people. However, crypto’s first fifteen years have been chaotic, to say the least. For example, Bitcoin has experienced severe price swings throughout its history – reaching a peak value of $69,000 in 2021 before then falling dramatically back down again. Marred by scandals, scalability issues and expert statements of a false dawn, crypto has remained a small economic player yet to make any tangible impact on our financial systems. 2024 however, has seen a rise in the value of Bitcoin to a new peak. Along with several other developments, this suggests a possible maturation of the currency and a move to the mainstream of global economics.
Social Awareness and Acceptance
Over the course of their existence, cryptocurrencies have become more embedded in our everyday lives, and it is clear now that they are firmly embedded in our social consciousness. With extensive coverage in mainstream media, as well as several celebrity endorsements and increased references in pop culture, the concept of crypto has become normalised in many societies. Overall awareness of cryptocurrencies has certainly increased in recent years – and whilst the complexities of the technology remain a mystery to many, the gradual acceptance of the reality of crypto has been a vital step in its move towards the mainstream.
Widespread Adoption by Businesses
Crypto is now being adopted across the business landscape, with almost all sectors integrating it into their services, and multiple major companies investing significant sums into the technology. Payment companies like PayPal, Visa and Mastercard have all integrated cryptocurrencies into their payment systems, which has allowed crypto to become a legitimate form of payment in multiple applications. For example, in the iGaming industry, many online casinos now accept crypto payments. This hasn’t been something restricted to just the US or Europe, and we’ve seen it reach as far as New Zealand. Speed is a huge reason why people use Bitcoin, however, it can sometimes be marred by network congestion and other factors. While it can be a rapid process, we are still seeing that most gamblers in the country are using traditional payments as a way to access the fastest withdrawal from an online casino in NZ. Popular restaurants such as Burger King, Chipotle and Domino’s also now accept crypto payments using BitPay. The technology has begun to seamlessly integrate itself into our everyday expenditure, strengthening the idea that cryptos will be essential in the years to come.
Integration into Traditional Financial Systems
A major hurdle for cryptocurrencies has been that for a long time, traditional financial institutions have dismissed it and refused to integrate it into their operations. However, in recent years, certain global banks have not been able to ignore the potential of blockchain technologies for enhancing their services. Last year, Swiss bank SEBA received approval from the Hong Kong SFC to offer cryptocurrency services in the financial centre – an important step in Hong Kong’s aspirations of becoming a crypto hub, whilst also highlighting a sea change in the general opinion on crypto. Furthermore, a recent study has found that around 80% of Japanese banks are now in partnership with Ripple, a currency that allows for faster and more streamlined international payments. As one of the largest and most forward-thinking economies in the world, this points to a promising future for crypto as it establishes itself across the globe.
Development of Regulation
The emergence of cryptocurrencies in the 2000s introduced a completely new concept to the financial sphere, introducing methods and operations that simply weren’t recognised in the regulatory frameworks of global governments. The consequence of this was the formation of an unregulated crypto market, resulting in market manipulation and other harmful practices becoming commonplace. This affected the perceived suitability of cryptocurrencies as a legitimate form of currency – governments are slowly catching up however, with major regulatory bodies from across the world such as the US SEC and the Japanese JFSA now developing clearer frameworks to more effectively regulate the crypto market. Once appropriate regulations are in place, world economies will be one step closer to a responsible and transparent cryptocurrency market. Some leading economies have gone even further, beginning to develop their own digital currencies, known as Central Bank Digital Currencies (CBDC). This will inevitably lead to greater legitimacy of the use of crypto – however, some raise concerns regarding the centralisation of a concept which was originally designed to shift control away from central banks.
Technological Advancements
The advancement of blockchain and other crypto technologies continues to drive forward with near-constant innovation in the sector. The huge potential of the technology has been identified and is now being adopted across various industries to catalyse innovation there as well. The combination of blockchain with A.I technologies, for example, is being heralded as a new online ‘power couple’, with the potential to revolutionise digital spaces. While Bitcoin is the poster boy of crypto, it has been other currencies such as XRP and Ethereum that have made a more significant impact on our financial systems. We can therefore expect new currencies to come to the surface and make an impact as the technology develops.
Remaining Issues
While it appears that crypto is destined for the mainstream, there remain several key issues that cannot be ignored. The first is the scalability issues related to digital currencies – compared to traditional payment methods, blockchain networks have limited throughput potential, which is a critical issue when scaling up to larger financial systems. Even now, high levels of congestion are common on blockchain networks, highlighting that more development is needed before the technology can be utilised on a greater scale. Secondly, different governments have approached crypto in different ways, which has led to the creation of inconsistent regulations across the globe. Conflicting regulations can be confusing and create uncertainty for the businesses involved – if regulations don’t become more consistent, companies will choose to use safer methods for their operations. Additionally, the enormous amounts of energy required to mine cryptocurrencies has led many people to question the sustainability of the technology. It is clear that as a society we need to reduce our energy consumption levels to limit our environmental impact, leading to concerns over the long-term suitability of cryptocurrencies.
To conclude, the potential of crypto is undeniable, and recent trends indicate that these currencies have become an established part of modern society. The integration of the technology into our businesses, financial institutions and cultures indicates that crypto is now part of our everyday lives. Several challenges remain, but it’s clear to see that the future of crypto is bright – and it won’t be long before crypto goes fully mainstream!
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.