By Alicia Maher
Till now, the cryptocurrencies are still being regarded as a ‘bubble soon to burst’ by skeptics and anti-Bitcoiners, comprising mostly traditional finance advocates. However, cryptocurrencies have managed to stay afloat giving the naysayers a run for their money. In fact, you could as well refer to them as the proverbial cat with nine lives or better still, the rising Phoenix.
Without doubt, every new technology is met with mixed reactions- positive reactions from those who are liberal and open-minded and on the other hand, pessimistic views from the set of people who are absolutely set in their ways and believe innovations are meant to alter the status quo. Well, they are, but in a better way; at least, not if the status quo is riddled with bottlenecks. A case in point is the internet which changed the status quo and now, cryptocurrencies and blockchain technology have emerged to do the same.
Shockingly, the popularity and widespread adoption of these two innovations have been reinforced by bans and clampdowns from around the globe. Fiat currencies are already being threatened by the traction cryptocurrencies are gaining. Thus, rather than an outright ban on their usage, governments around the world have been left with no choice than to regulate the crypto space. In view of this, there are factors that have contributed to the resilience of cryptocurrencies.
They are Built on the Blockchain
Cryptocurrencies have a strong backing as they are not physical. As such, this puts them above destruction unlike physical assets. This is because they are built on the blockchain, which is created with codes. Blockchain technology is regarded as the most secure means of storing an asset and even some traditional institutions are already employing its use for information and file sharing systems.
Cryptocurrencies Birthing New Technologies
Cryptocurrencies are also paving the way for new technologies, especially CBDCs. It was crypto assets that birthed the idea of a central bank digital currency for most countries. Since regulators in these countries have been unable to ban crypto assets, they have resorted to an alternative which they think will rival cryptocurrencies. The control that most governments lack over crypto; they can exercise such control over the CBDCs. So now, cryptocurrencies are not all about money, but innovations and technological improvements.
Real life Use Cases
They are not a bubble as claimed in some quarters because they are here to address real-life challenges. As long as they have identified these needs and can be deployed to solve them, they would span generations and keep evolving. One major need they are positioned to address is the problem of centralization which is the forerunner of other issues in the traditional financial system, ranging from slow transactions, third party interference to intrusion of privacy, to exorbitant transaction fees and a host of others. Accordingly, all of these issues are now being addressed by cryptocurrencies with relevant improvements being made.
In conclusion, rather than a straight-jacket approach towards cryptocurrencies, regulators are now compromising and looking forward to how they can regulate the space to protect users’ interests. Regulators can only take a back seat on cryptocurrencies. Interestingly, skeptics are being won over as they have seen in the error of their thoughts and opinions.