Is cryptocurrency future currency? Bitcoins V/s other currencies?

Cryptocurrency is a digital asset that is the first alternative of paper currency which was launched as a medium of exchange and all records are maintained in a ledger in a computer database with no involvement of paper currency. It’s typically used as decentralized control with software control for financial transactions and no control through the central banking system. 

In this regard first cryptocurrency launched in 2009 named “Bitcoin”, it was introduced as a software-based currency in 2009 later other currencies were Litecoin, Namecoin, Peercoin, Dogecoin, Gridcoin, Primecoin, Ripple, Nxt, Auracoin, Dash, NEO, Mazacoin, Monero, and till 2017 overall many cryptocurrencies were launched. 

Among other cryptocurrencies, only Bitcoin is high in worth currently as per latest record 1 Bitcoin worth 43,340 USA dollar, maximum it touched 50,000 USA dollar, now the question arises why Bitcoin have so much value and what’s it future? Will we be seeing this as an alternative currency that is used by all countries as E-cash?

As per the basic economics concept, the currency which has successful six key attributes is always the most demanding currency. These attributes are scarcity, divisibility, utility, transportability, durability and counterfeit ability, and Bitcoins are very rare in quantity, current supply of Bitcoins is 18 million globally and each year Bitcoins are released by half of every four years and its supply should cross amount of 19 million by year 2022, so that proves how scares and rare it is. Bitcoins are divisible up to 8 decimal points, the smallest unit of Bitcoin is called “Satoshi” and it is equal to 0.00000001 Bitcoin. Bitcoin has the highest utility as it is a blockchain technology, which is a distributed ledger system and decentralized model that means parties involved in the trading of Bitcoins do not need any exchange of trust. 

Bitcoin is very fast transported at very low cost no matter how many numbers of transactions are involved. Then comes durability, Bitcoin cannot be burned, torn or unusable as it is a digital currency, therefore, the value of Bitcoin can never be reduced or lost since it’s a paperless currency. Last comes counterfeit-ability, where due to its decentralized mechanism, E-cash feature and blockchain ledger system it is tough to counterfeit or be involved in any fraudulent transaction. 

People are investing in Bitcoins due to its increasing value and stable value as it is generating good amount of profit to Bitcoins player however, this investment also comes with its challenges as an investment in Bitcoin is never easy it requires huge amount of money, close check on computing and change in value, medium of exchange, prone to hacking and above all since it is electronic money so it is not backed by any asset be it cash or gold. 

Now the question comes Is Bitcoin a future currency? Will it be replacing conventional paper money? The answer is maybe, as Bitcoin is still be used in various online applications but when it comes to a real exchange of money then Bitcoin is not a viable option as it is paperless money, not controlled through conventional demand and supply mechanism of centralized stock exchanges and not backed by assets or reserves.