Today there are many crypto exchanges successfully trading cryptocurrencies, countless exchange platforms, and a variety of ICO projects. Vigorous activity is in full swing, assets are being driven back and forth, the boards of mining farms are melting from the strain... And yet all this is happening inside a small, encapsulated space that is weakly connected to the surrounding world. So, what are cryptocurrencies in the modern world?
In and of themselves, cryptocurrencies represent an extremely unusual economic phenomenon. And the question is not even how to classify them (money, money surrogates, securities, etc.), but about their relationship with the rest of the "classical" economy.
Cryptocurrencies still remain a virtual asset "in itself," practically independent of the "proper" economy (except, perhaps, through the electricity consumed). Yes, a whole infrastructure has been built around them, professional specialists have appeared, but a clear answer to the simple question still has not been voiced: "What are cryptocurrencies in the modern world and why are cryptocurrencies needed?".
Two factors serve as drivers of the cryptocurrency exchange rate:
- The expectation that this asset will finally find its place in the economy and acquire real usefulness.
- Speculation and manipulation by market participants.
Since the realization of the first factor is somehow not going very well for now, the market is entirely subordinate to the second factor. Moreover, if a collapse of Bitcoin along with Ethereum and other cryptocurrencies were to happen right now, the global economy would not particularly notice it — there would be no "domino effect" to expect.
And one can reason for a long time about the "cryptocurrency market," analyze exchange indicators, reason about trends and signals, but in reality this is — flailing about in a small river. And to reach the ocean, a connection with the "big" economy is needed, which largely depends on the goodwill of regulators. So we will wait to see what the great and mighty SEC (Securities and Exchange Commission) decides — there are persistent rumors that a Bitcoin ETF is about to be approved. This is not yet a full-fledged "classical" asset, but it is already, at least, a first and serious step.
And as of today, cryptocurrencies in the modern world are a kind of symbol of freedom. According to Bitcoin supporter and TV host Max Keiser, cryptocurrencies will contribute to the resistance against the dominance of corporations and big bankers, and he compared cryptocurrencies to the movement of the so-called "yellow vests" in France. Max Keiser emphasized that Bitcoin has effectively become a symbol of the global financial revolution. A similar point of view was expressed in the pages of the popular publication Time by Alex Gladstein. He emphasized that cryptocurrency holders possess absolute economic freedom. At the core of cryptocurrencies lies a technology that stimulates the large-scale development of the global blockchain industry.
And such capabilities of cryptocurrencies as the absence of control, transfers directly to one another without intermediaries, the transparency of a transaction in which complete anonymity is preserved, attract many people. One can earn on cryptocurrencies, for example, earn on cryptocurrency mining or trade them on cryptocurrency exchanges. Cryptocurrencies are able to act as payment or be an investment instrument. They can be traded, and instant transfers abroad can be made. And already, given the growing popularity of virtual money, more and more stores around the world are beginning to accept them as payment, which in turn is, although still small, nevertheless a connection of the cryptocurrency world with the "classical" economy. And with each passing day cryptocurrencies are becoming more and more popular and strive to become an integral part of the modern world.
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