Cryptocurrencies are current, no question about it. At the latest when Bitcoin posted steep price gains in 2016 and 2017, digital currencies were enjoying increasing popularity with investors. But which cryptocurrency has the future?
Since Bitcoin entered the financial world in 2009, thousands of altcoins and tokens of various types have been added. Some of them are based on the Bitcoin blockchain or are even forks of BTC, such as Bitcoin Cash or Bitcoin SV, while others go their own way.
Ethereum with its smart contracts or Ripple could be mentioned here. For investors and traders, given the large selection, the question arises as to which cryptocurrency has the future and which one to invest in.
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More than 2,500 cryptocurrencies and tokens
Different software architectures
Different areas of application
Under certain circumstances strong price fluctuations
Table of Contents
Crypto future
Meme coins with a future
Best cryptocurrency
Unique selling points
Possible applications
Market dominance
"Standalone" or cooperation
Volatility as a criterion
Money of the future
Invest and trade
What will the crypto future look like?
Digital currencies are newcomers to the financial industry compared to other products that have been around for decades or centuries. Nevertheless, Bitcoin & Co. has managed to shake up the markets properly, and there are also constant changes in crypto trading.
The initially little-noticed BTC, created as a decentralized, tamper-proof P2P payment solution, grew considerably from 2016 onwards. Almost all known cryptocurrencies benefited from price gains. This aroused interest in digital dollars.
From play money for nerds, crypto-coins have now become a serious and serious phenomenon that has proven its practicality.
Starting with the acceptance of Bitcoin payments in webshops via Bitcoin machines or the possibility of paying utility bills with Bitcoin (in Austria), cryptocurrencies began to find their way into everyday life, albeit not without problems.
Bitcoin itself is comparatively slow in processing transactions due to the small block size of only 1 MB. Even if improvements were made via Segregated Witness Updates, or SegWit for short.
No problem for the loyal fans of the first hour - they approve of the future of the world's first cryptocurrency and consider the BTC primarily as an investment, so to speak as " digital gold ".
Meme coins with a future
Meme Coins, such as Dogelon Mars, or Meme Tokens are cryptocurrencies that were created to make a mark or just for fun. Even if they have little or no useful application in practice, money can be made with meme coins.
The following meme coins could be considered for this:
Dogecoin
Shiba Inu Coin
Miami Coin
no coin, but NFTs are also possible
You can find out more here: Earning money with meme coins
Investors can also take advantage of the boom in cryptocurrencies and NFT art by buying stocks of companies that enable crypto trading. This includes, for example, the Coinbase share.
True to the motto:
"In a gold rush, don't invest in the gold diggers [the coins], but in the shovels [crypto exchanges]."
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Investments carry the risk of losses
Best cryptocurrency? Digital currencies suitable for everyday use have a future
Even before the Bitcoin hype, however, the race to develop a cryptocurrency of the future had begun. Given the increasing number of users and transactions, one still wants real-time payment executions that can keep up with credit card providers, for example.
Scalability, the growth of a blockchain and its coins, is one of the important issues about the well-known cryptocurrencies and their faster, younger clones.
Cryptocurrencies that are “mined”, i.e. generated and put into circulation by computing power, a cryptocurrency with a future must also put up with the question of how quickly and how many new blocks can be created. It is also important to know when the final number of coins has been issued and whether " inflation " is conceivable.
EXCHANGE RATE FLUCTUATIONS AND INTEROPERABILITY AS MAJOR CHALLENGES
Another critical issue is the volatility of cryptocurrency prices. As a means of payment suitable for everyday use, digital currencies have a hard time, among other things, because the pricing of goods and services requires additional effort from the "crypto" dealers.
But interoperability also plays an important role when it comes to the question of "which cryptocurrency has the future?" The digital currency system needs to be able to interact with fiat money in one way or another to become more exchangeable and tradable.
With many crypto exchanges, it is still only possible to buy less well-known coins with Bitcoin, sometimes Ethereum. And the investor often has to buy them elsewhere first.
Cryptocurrencies with a specific area of application have an advantage
Inflation also plays a role in digital currencies
Interoperability with other currencies is crucial
Volatility should decrease with increasing acceptance
Cryptocurrency: What has added value has a future
Digital currencies that want to stand out from the crowd of coins and tokens must have a use. This is the only way to ensure that users, investors, and financial service providers, but also companies, are interested in them.
The interest is reflected in the market capitalization. Therefore, it is not enough to ask, “ What cryptocurrency has the future? "- Instead, one should ask," Which cryptocurrency has interesting or useful unique selling points? "
In this case, the future will come by itself. The areas of application that have already been implemented include:
Technological and administrative added value through intelligent contracts
Building bridges between crypto and fiat currencies
Key currency status through market dominance
Stable purchasing power through reliable collateral with stable coins
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SMART CONTRACTS AS THE BASIS OF A CRYPTOCURRENCY OF THE FUTURE
One example of this is Ethereum 's smart contracts. The network is not a Bitcoin clone but started from the beginning with the intention of generating added value beyond the mere payment power of the token.
And Ethereum had resounding success with it. The forgery-proof smart contracts allow goods and services to be exchanged against payment without the need for intermediaries such as lawyers or notaries, which are often inevitable in the analog world.
For goods and real estate transactions, but also for financial services, it is an ideal medium that has been discussed since the 1990s and implemented with Ethereum.
Ether, the token, is merely the means of payment in a blockchain, which is becoming of interest to more and more companies. The Swedish furniture giant IKEA has also been interested in it for some time. Anyone who can offer such a business model and stand out from the competition with well-developed technology has a good chance of being one of the coins that deserve the title cryptocurrency with a future.
Other possible uses for the cryptocurrency of the future
The use of the blockchain for intelligent contracts can be spun out considerably. An application in the creative industry, for example, when using and paying for music downloads, offers artists and their fans a win-win situation that does without the costly services of international music agencies and publishers.
The same goes for the gaming scene. A market with enormous growth potential, in which gaming solutions and add-ons can be sold directly from the programmers to end users via a blockchain, such as Voxel Coin. The simply “knitted” but incredibly reliable smart contracts raise the digital consumer behavior of the third millennium to a new level, beyond platform economies such as Amazon or eBay.
And without the blockchain, the implementation of completely independently acting and interacting machines, the " Internet of Things " or IoT, would be inconceivable.
In this area, too, there are already platforms that allow the “intelligent” devices of the future not only to communicate with one another and to register requirements, but also to meet them - and pay for them. The digital currency IOTA should make it possible for the refrigerator to order food and cars to pay the parking fees.
Smart contracts are finding their way into more and more areas of life
Blockchain technology can be used in many areas
Market dominance also plays an important role in which crypto-coin has the future
Market dominance as a criterion for the lifespan of a cryptocurrency
A digital currency that is interesting for users must therefore offer something so that users can use it. However, it is not enough if the spark only jumps over with relatively few users.
Because for a coin to last, it is important that it comes into circulation and spreads. Bitcoin is the best example of the importance of widespread use.
With a market share of almost 70% and a market capitalization of more than 1 trillion US dollars, BTC has the status of a digital reserve currency. This means that Bitcoin has enough market dominance to secure its future. The widespread use and acceptance of Bitcoin will ensure it has a long life.
"Standalone" or cooperation
While Bitcoin does not look bad as a “standalone”, other coins or tokens depend on the platforms behind them to cooperate with relevant companies. One example of this is Ripple, a project that involves connecting cryptocurrencies to the international network of fiat financial service providers.
The goal: to enrich and improve global payment transactions with the blockchain.
Anyone who has ever followed an international bank transfer or made costly transfers with Western Union knows that there is still a lot of air here. Without the cooperation with established financial service providers, such a project could not take off in the first place.
Stellar Lumens is almost identically designed, but not for institutional use, but for private use. The coin made good gains when IBM began to take an interest in the platform.
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Still, other coins have been developed by companies from the start and designed as "internal" means of payment, such as the Chinese Binance Coin. By the way, the Pancakeswap Coin is also built on the Binance network. Another example of this type is the Coin Libra planned by Facebook. Due to the size and influence of the company behind it, Libra is causing discomfort, and not just in the financial markets.
Not all cryptocurrencies are dependent on "sponsors" or direct cooperation with well-known brands. Ultimately, however, every new coin is about being accepted as a means of payment. If this is not the case, the coins become useless and the blockchain project behind them dies a quick death.
The cross with stability
Bitcoin and other well-known digital currencies, at least the top 20, tend to have extremely high volatility, which is not only noticeable over a month or week but even daily.
Exchange rate fluctuations of more than 10 percent in both directions within a few hours are not uncommon. This represents a considerable obstacle when using cryptocurrencies in everyday life. As is common with fiat currencies, money should be a medium of exchange with a reliable value that remains constant over long periods. If medium and long-term purchasing power is not secured, crypto users cannot rely on the currency.
Developers are also striving for solutions to this problem - in this case, the so-called stable coins. Such stable cryptocurrencies are secured by another asset and are intended to build a bridge between crypto and fiat currencies.
They combine the stability of national currencies with the immediate, confidential payment execution of cryptocurrencies. Well, known is Tether (USDT), a stable coin that is pegged to the US dollar. The Facebook project Libra is also to be linked to an asset basket. A link to the gold price would also be conceivable.
A stable coin like Tether is relatively well protected against inflation and, due to its stability, is of no interest to investors or speculators. Instead, the concept is specifically suitable for getting the tokens out into the open.
Cryptocurrency: future of money, the money of the future
Given the numerous possible uses for cryptocurrencies and the blockchain, there is no need to worry about digital currencies disappearing again. On the other hand, of course, numerous users ask themselves whether the coins will replace the “real” money at some point.
The world’s central banks will likely issue national currencies on a crypto basis in the future. On the other hand, it is less likely that a cryptocurrency such as Bitcoin or Ethereum will replace our money.
After all, the purchasing power of national currencies is also based on the consensus that they should be recognized as a means of payment. In this case, however, secured by the economy of the country concerned. But here, too, it is no longer a question of so-called “commodity money”.
This refers to currencies that were still common until the beginning of the 20th century when money coins received their value from their gold or silver content or were secured by national gold stocks.
Today's monetary system is very likely to be replaced by digital central bank money
Many governments are already researching this topic
Concrete implementation is not yet clear
State and free cryptocurrencies will exist in parallel
Today the central banks of the states control the exchange rates of the national currencies to a great extent. A system whose vulnerability became clear years ago. Growing doubts about the validity of the international financial system are one of the reasons why Bitcoin was created in the first place and why investors are becoming increasingly interested in digital currencies.
It is realistic to assume that cryptocurrencies and fiat currencies will coexist shortly. Because economically, one will no longer want to do without the use of the blockchain, and that makes corresponding tokens a necessity.
Thanks to digitization, acceptance will continue to increase. User convenience will continue to increase, and integration into the global financial system is no longer unthinkable.
Invest and trade with the cryptocurrency of the future
The financial world has already tuned in to the newcomers. The big banks already offer crypto funds, and derivatives such as certificates and CFDs can also be traded.
While established digital currencies such as Bitcoin, but also Ethereum, are more likely to stabilize in the long term and are therefore suitable for patient investors, derivatives are a way of benefiting from the (still strong) price volatility in the short term in day trading.
In particular, contracts for differences on currency pairs consisting of cryptocurrencies and euros, US dollars, or British pounds are increasingly part of the trading offer at forex and CFD brokers, which also allow private investors and traders to speculate on the price development of cryptocurrencies.
Since contracts for difference are constructed in such a way that traders can use them to speculate not only on rising but also on falling prices, they are particularly well suited to exploiting the volatility of the coins.
In addition, CFDs can be leveraged, even if only by a factor of 1: 2 for cryptos. Certainly, a way for traders to get good returns. However, always provided that you are willing to familiarize yourself with the topic and keep an eye on developments in the crypto world.
Because only by taking into account the trends and market news can traders profitably anticipate the price developments. A broker, who supports you with training offers and information, and allows you to carry out your first crypto trades with a demo account, helps you get started practically - initially without any financial risk.
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