ByThe partners of Challengesle 25.06.2021 at 17h02Reading 4 min.
Whether cryptocurrencies have a future is a question that arises forcefully in a rapidly changing environment. Cryptocurrency is not just a new financial product, but a virtual currency with all the characteristics of a fiat currency.
Whether cryptocurrencies have a future is a question that arises forcefully in a rapidly changing environment. Cryptocurrency is not just a new financial product, but a virtual currency with all the characteristics of a fiat currency. It is fungible, divisible, tamper-proof, rare, identifiable, transferable, but it escapes traditional centralized regulatory systems by relying on the decentralized and highly secure protocol of the blockchain (data storage and transmission technology). Cryptocurrencies or crypto assets follow in the footsteps of dematerialization that affects all sectors of society and responds to new digital uses.
After a confidential start from 2008 to 2016, where its listing ended up reaching a peak at more than €16,000 at the end of 2017, bitcoin is now at the top of the ranking of cryptocurrencies, with a valuation at €26,944 as of June 8, 2021, ahead of Ethereum (valuation at €2,049 on the same date).
The prices reached by the different cryptocurrencies, their performance and the dynamics of this market are significant of the interest and confidence of investors, institutions, large companies and individuals for this alternative and volatile currency. The IPO of Coinbase, a platform specializing in the purchase, sale and storage of crypto currencies, attests to the attractiveness of crypto assets, with a valuation of $ 86 billion. A bright future
It therefore seems that we are witnessing an alignment of the planets for crypto currencies, and in particular a very favorable bitcoin forecast. All indicators are green, and an ecosystem is gradually being set up, which trivializes cryptocurrencies both in terms of investment and for daily use in the real economy. In financial markets, specific funds based on cryptocurrencies (BTC ETFs) facilitate investments in these securities and open them to the general public. Thus, platforms like PayPal allow transactions in bitcoins. NFTs (non-fungible tokens) backed by original digital works use Ethereum blockchain technology and are redeemable for cash in ETH (Ethereum cryptocurrency) or wrapped bitcoin (bitcoin “packaged” using the ERC-20 standard compatible with the Ethereum blockchain). Elon Musk has also given decisive support to cryptocurrencies. In early February 2021, he invested $1.5 billion in bitcoin through his company Tesla which allowed for a while the purchase of his cars in virtual currency.
In the same dynamic, Jack Dorsey, the boss of Twitter, bought 170 million bitcoins through the FinTech Square and owns 5% of its cash in crypto currencies. Square develops innovative payment solutions for merchants (payment terminals) and the general public, with Cash App which is a next-generation mobile solution aimed at simplifying the use of cryptocurrencies in real life. The France is also very active on the subject, with the company ACINQ participating with Lightning Labs and Blockstream in the development of the Lightning Network, a network that increases the processing capacity and performance of the Bitcoin network (blockchain). Cryptocurrencies to watch closely
A large number of cryptocurrencies exist today, with disparate prices. One of the first is bitcoin, a precursor to virtual currency and blockchain. It is currently the one with the highest rating. The bitcoin community offers several variations of its digital token, in particular to create compatibilities with other blockchains and intervene on specific markets (ERC-20 standard) such as NFTs, or following a hard fork (creation of cryptocurrencies based on different versions of the blockchain). Ethereum comes in second place. Its blockchain being used for NFTs, this currency has benefited from a decisive spotlight thanks to the development of this market. The Ethereum blockchain offers superior performance to the Bitcoin blockchain, which should allow it to continue its growth. In third place, we find Tether, a stable cryptocurrency modeled on the value of the US dollar to be used as a digital dollar. This equivalence explains why a significant part of cryptocurrency trading is done with Tether. We must also name the Dogecoin, which comes from a hard fork from the Litecoin blockchain. It targets bitcoin users and recently benefited from a boost from Elon Musk.
