Whenever someone says the word cryptocurrency, the first thing that comes to the mind is Bitcoin. This virtual token of currency became all the more famous when its value rose to $20,000 in December 2017. However, after that Bitcoin saw a huge crash and its value decreased by a large percentage. This led to the declaration by market experts that cryptocurrencies like Bitcoin are a sham and are going to be dissolved very soon, especially because of the fact that it did not have any support from the government. According to research, this seems to be like an inappropriate or overly-spoken statement because if market value and its use is anything to go by, cryptocurrencies are again climbing up the ladder of popularity and garnering renewed interest from investors, venture capitalists to the likes of
Erik Gordon and JP Morgan Chase.
This can be attributed to a number of features. The governing body has become more accepting of the fact that transactions through cryptocurrencies are secure and does not leave any room for hacks or other malicious attempts. Bitcoin is the one that has found the most favour but others have also made a name for themselves. Thus, it can be safely said that the time for cryptocurrencies is not over, in fact, it is really far from it. Solid proof of it is that JP Morgan Chase, who is considered a standard above all in banking is almost on the verge of releasing their first cryptocurrency in the market.
This announcement came in contrast to the opinion that banks were the one who were most opposed to the idea of cryptocurrency but it looks like they have become more accepting of it recently, after looking at its benefits. They felt that transaction history could not be easily tracked and that would leave a lot of scope for nefarious people or miscreants to fund their illegal activity. Cryptocurrency is more as
collateral for loan and secure payments. A number of such issues regarding cryptocurrencies and why it is still ready to stay and thrive has been discussed in the article below.
Why choose cryptocurrency?
Before someone says that cryptocurrency is here to stay, they should first assert its primary usefulness and to do that a detailed knowledge of the same is needed. Firstly cryptocurrency is basically a virtual form of currency that uses cryptography as a method of providing security. It is particularly this feature that makes cryptocurrencies secure and safe from counterfeiting. The transactions of cryptocurrency are done through tokens in the virtual world. The word crypto refers to the encryption methods that are used to facilitate these transactions. There are a large
number of advantages of trading in cryptocurrency. First and foremost, it facilitates an easy fund transfer, without any hassle at all. It does not need the interference of any third party while doing this transfer and a direct link is created between the two concerned parties. Something called public keys and private keys are used to process the transactions. Secondly, a processing fee is incurred by the banks and other financial institutions to facilitate transactions, which can also be completely avoided using cryptocurrency.
Cryptocurrencies are the first ones that introduced the concept of blockchain technology, which includes the maintenance of a ledger online that will keep a track of all the activities. Whenever a new block is generated, a stringent verification process is conducted by every user, making it very difficult to conduct any fraud. Now the application of this concept may have originated for cryptocurrency but it can be used for wider services like voting, crowdfunding etcetera. Finally, it is a completely organic concept. No government or any other related agency has any control over it. This might be good news for users but it is not so much for the government, mainly on the pretext of not being able to keep a track of transactions which have the potential to be used for evasion of taxes or money laundering. Blockchain can be one of the best
technology for trading in the international trade market. One disadvantage associated with cryptocurrency is that all transaction history might be lost if a system recording the data crashes and there is no backup copy in place. All these pros and cons make the aspect called cryptocurrency and it must have become clearer by now that the advantages are more. Thus, this further adds to the point that cryptocurrency is here to stay.
A new announcement by JP Morgan Chase
JP Morgan Chase, one of the most premium banks in the US, made a new announcement that took everyone by surprise. They said that they are launching their own version of cryptocurrency, a JPM coin for future transactions. This is the first real-world involvement of an institution of such kind with cryptocurrency and some are hailing this step as a step closer to future. JP Morgan Chase moves around a lot of money, close to $6 trillion dollars, which needs a lot of care taking and is always on the verge of some fraudulent activity. The New York-based bank has said that they are going to start with trails in the coming months shortly and a tiny fraction of the transactions will be handled by these coins. They believe that their engineers have been able to address whatever concerns that they have had regarding cryptocurrencies and it is time that they take the leap forward.
They are really keen to implement the blockchain concept but knew that they lacked any lightning speed wire transferability as wire transfers hardly did the job. JPM coins can come to the rescue here. This announcement is being heralded as shocking to some as the bank had previously vehemently opposed the use of cryptocurrency and called it a scam as well. This form of currency had the potential of completely disrupting banks and the services they provided, which was opposed by all. JPM coins will have a fixed value of one dollar and will not fluctuate with the economy like other cryptocurrencies. They cannot be used by investors as a mean of trade though. Only the organizations who are tried and tested and most importantly, trusted, could use this cryptocurrency.
The payments that are done to big agencies through the bank has the issue of losing out on a lot of time and money during transit. Instead, JPM coins are more real-time. Debt insurance can also be done more easily using it. This is where the application of blockchain comes to the forefront and settlements are done really fast. Companies that use a treasury made accessible by JP Morgan can use subsidiaries instead of the conventional dollars and can be replaced. Transactions can only be done through devices connected through the internet. Since JP Morgan Chase has taken this big step, it is natural to cause a stir, making people rethink their opinion about cryptocurrency, further bolstering the point of renewal.
Will cryptocurrency survive? Expert opinion
Grayscale Investments and Digital Currency Group are one of the biggest investors in the market and the CEO of the company, Barry Silbert believes that cryptocurrencies are going to blow out pretty soon and the only one that has the ability to survive the crash is Bitcoin. He believes that all the companies that are cropping up every other day and had Initial Coin Offerings that were impressive initially but could not be maintained because of it being primarily for raising funds. Almost 80% of the cryptocurrencies have been absolved or become illegal by now but Bitcoin is the one that survived the test. Though their share price has gone down to considerably, still it stands pretty solid and has almost got the value of digital gold.
Thus, it must have become clear from the article that cryptocurrency is not going to die an unfortunate death and will be used for transactions in the near future. The support of the bank, JP Morgan Chase is enough testimony for it.