The hype regarding cryptocurrencies is certainly fading away. The main reason is that a lot of people lost their trust in cryptos over the years. Even though the entire industry has a vast potential for future advancements, especially the blockchain technology behind it all, people are still skeptical about it.
Does that mean that the cryptos have lost their relevance? No, it doesn't. The fact of the matter is that cryptos still matter and that people losing trust in them has nothing to do with their importance or relevance.
It's only natural for a new market, especially the one that's decentralized and unregulated by banks or governments, to have its challenges, but those challenges can be dealt with over time.
Needless to say, every recent improvement and advancement in the crypto industry was designed to mend the issues and win back the trust of investors and other people alike. With that in mind, here are a few reasons why cryptocurrencies still matter.
The blockchain technology behind cryptocurrencies serves as a decentralized public ledger for peer to peer transactions. As much as people distrust cryptos at the moment, they still distrust banks and governments more.
The idea of a ledger that doesn't require a middleman to interfere or impose additional fees upon you is still quite relevant.
Not to mention the fact that crypto transactions are much faster than transferring fiat money. Instead of waiting for a couple of days, you just have to wait for a couple of minutes. In other words, cryptocurrencies serve as a hedge against costly mistakes governments and central banks often make.
Technology that endures
As we mentioned before, the blockchain technology was originally designed to be a ledger – a distributed system in a decentralized environment. Over the years, people have found numerous other uses for this technology in many other operations and processes aside from cryptocurrencies.
That said, the blockchain survived for so long because of the peers who help maintain it. As an example, people still engage in crypto mining not just because of potential profits but also because they want to help the blockchain endure. This technology has a vast potential for future implementations and people want to see this technology being used wherever it's possible.
We have all heard the stories about how the blockchain technology is virtually impossible to hack, yet numerous hacking attempts and scams have been successful. So what's the deal here? Blockchain technology is, indeed, virtually impossible to hack.
You'd have to take control of the majority of the nodes within the blockchain network to infect it with malicious software and there's simply not enough computing power today to achieve that. However, other layers of the blockchain can't pride themselves in having such security measures in place.
These layers are trading platforms and e-wallets, for instance. This is where hackers were successful in scamming people and that's the reason people lost trust in cryptocurrencies, in general.
Still, the idea of having a technology that's resistant to hacks in a world where cybersecurity is one of the major concerns still matters. Some cryptocurrencies may not be as efficient as the others but the potential is there and in time, we might see significant improvements security-wise.
New cryptos on the market
Bitcoin was the first cryptocurrency on the market that introduced the blockchain technology back in 2009. Since then, over a thousand new cryptocurrencies have emerged. Each new crypto is based on a relevant solution, service or product regarding the crypto sphere and digital assets.
Simply put, ICOs (Initial Coin Offerings) and tokens represent a digital approach for investing in a company and their vision. For investors, this is yet another way to diversify an investment portfolio and include digital assets as an investment option.
As an example, Bitcoin introduced the blockchain, whereas Ethereum, for instance, introduced digital contracts. It's no secret that some new cryptos are just a scam but the majority of new cryptos on the market truly do offer an innovative solution for the investors.
A new way to save money or raise capital
When all factors are combined, cryptocurrencies provide digital means toward saving money or raising capital for investments. So far, people are used to traditional means such as investing in stocks, bonds, real estate and so on or saving money via IRAs (Individual Retirement Funds).
Cryptos offer the same things. The only difference is that there are no governments or banks involved. In other words, no saving or investment terms, taxes and interest rates. Tech-savvy people, mainly the millennial generation, find this option to be very appealing. After all, you get to enjoy the same options without worrying about the state of the global economy, which isn't looking promising by the way.
The cryptocurrency market is undoubtedly a volatile and unstable environment. That said, people have lost trust in cryptos and they're generally dissatisfied with the current situation. However, that doesn't mean that cryptos don't matter anymore or that they're becoming obsolete. Their potential is still there and it just requires a bit of polishing before they can truly shine.