Insights from the Girard School of Business and the School of Science and Engineering

Cryptocurrency emerged a decade ago, promising a convenient and secure way to make digital transactions. However, the predictions of a worldwide financial revolution have fallen short, as cryptocurrency has faced challenges including countries considering banning their use and issues with theft and security. Right now, the future of cryptocurrency looks limited, at least in terms of what was first envisioned. However, cryptocurrency currently still has a $166 billion worldwide market. Bitcoin, a type of cryptocurrency, currently has a market value of $92.3 billion alone. 

What Is Cryptocurrency?  

Cryptocurrency is a digital currency that works as a medium of exchange between two parties, just like money. Because of the ease of use on a digital platform, cryptocurrency is often touted as an excellent alternative to paying by cash, check or with a credit card. It typically works with strongly secure platforms, such as blockchain, to ensure that transactions are secure. The three areas of importance in cryptocurrency are confidentiality, integrity, and authentication. Going forward these factors will be weighed heavily in the future of cryptocurrency.

The Current State of Cryptocurrency 

There are a few factors that limit the growth of cryptocurrency’s future.  

Bitcoin Drops in Value 

Bitcoin dropped dramatically in value in 2018, with $480 billion in value being wiped out of the market, according to CNBC. The business cable channel also reported that at a meeting in early 2019, some financial experts projected that it might drop to zero in value. That obviously has not happened, but it’s a dire warning.  

On the other hand, a recent A.T. Kearney report projected that Bitcoin would bounce back and regain most of the market by the end of 2019.

China, India May Ban Cryptocurrency

China is considering banning cryptocurrency mining, according to Forbes. The country added mining to a list of activities that may be banned because of (according to China) a lack of safe production conditions and the enormous amount of electricity needed for cryptocurrency mining. Cryptocurrency mining involves placing transactions on the blockchain ledger using complex mathematical formulas. The Chinese say the practice wastes energy and generates between three and 15 tons of carbon dioxide a year, according to the report from China as quoted in Forbes.  

India is also working on a legislative bill to ban cryptocurrency from the country. 

Both of these pending potential bans will have drastic effects on the future of cryptocurrency.

Theft and Security 

The clear winner in the cryptocurrency boom is blockchain, the technology used to create secure ledgers of digital transactions has been largely successful. However, there have been issues with online wallets used to store currency, they have proven to be a vulnerable area for hackers. 

The future of cryptocurrency is unknown, but it certainly has lost a lot of the luster of its initial press. But this is the case with technology and data, the dream of what can be done sometimes outstrips the ability to do it safely and well.