How Cryptocurrency has Shaped the Financial Realm...what lies ahead??

In establishing a metric as to how cryptocurrencies have shaped the financial realm, I'm going to begin this publication with a brief overview of cryptocurrencies.

The origin of cryptocurrency could be dated far back as 2008 with the creation of Bitcoin by Satoshi Nakamoto whose identity remains a mystery. Over the years many theories have emerged about who Satoshi Nakamoto is but yet none has been able to unmask the person or group of persons.

In response to the great financial crisis in 2008, the concept of bitcoin was launched to hijack the control of currency from the elites and give the common man a chance to experience such control thereby bridging the lacuna originally experienced between races and classes.

By operating free from central control and by relying on a p2p system and cryptography, its operations are guaranteed a degree of security and confidentiality. Transactions are encoded in a blockchain which functions as a digital ledger to store information in a way that it cannot be forged or compromised.

comparison between cryptocurrency and conventional currencies.

It's important to note that cryptocurrencies, beginning from the inception with the creation of bitcoin were designed to mimic the attributes of conventional currencies and also serve as an alternative form of the payment system. This is the sole reason why we can itemize similarities in their functions, some of these similarities include.

Medium of exchange - both conventional currencies and cryptocurrencies function as a medium of exchange and can be used in transactions involving purchase and sale.

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Store of value - Another similarity between cryptocurrencies and conventional currencies is that they both function as a store of value. They are transferrable and storable for a long time.

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Divisibility - just like conventional currencies can be divided e.g a dollar can be divided into 100 cents. Cryptocurrencies are also divisible, one ETH can be divided into as little as 0.0001 ETH.

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Variety - Both cryptocurrencies and traditional currency come in a variety of forms. Traditional currencies include the USD, Euro, Yen, Naira, etc. While cryptocurrencies include Ethereum, Bitcoin, Steem, Ape, etc.

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DIFFERENCES

	Cryptocurrencies	Conventional currencies
1	Decentralized and free from external control	Conventional currencies on the other hand are subject to centralization and governed by financial organizations of a country such as the central banks
2	No involvement of third parties is required in transactions due to the p2p enabled system	Requires third-party intervention in the confirmation of a transaction
3	Records of cryptocurrency transactions are encoded in an immutable blockchain, making it impossible to compromise	Transactions relating to conventional currencies are recorded on computers, native ledgers, or databases highly susceptible to alterations
4	Due to the removal of third parties in transactions, the speed of operations is faster.	Slower than cryptocurrency transactions due to the need for verification from third parties.

distinctive innovations of cryptocurrency and its downsides.

The distinctive innovation of cryptocurrency is encoded in its entire building blocks "Blockchains" which are distributed ledgers, absolved from external control functioning to record the provenance of digital assets.

Since their inception, cryptocurrencies have significantly aided in the resolution of major real-world problems. Some of these include the problem of double-spending, which is a common issue with traditional currencies. Individual transaction verification is how cryptocurrency addresses this issue.

Another was to serve as an alternative system of payment that operates in isolation from external control and manipulation but still mimic the attributes of conventional currencies.

Cryptocurrencies have also helped to disintermediate banks and tertiary institutions from transactions with the utilization of a Peer to Peer (p2p) payment system which does not rely on the confirmation of third parties. This has helped to speed up the execution of transactions as well as re-instate the feature of confidentiality when transacting.

Major downsides

The major downside of cryptocurrency to date has been its problem of scalability. Although the number of digital tokens is on the rise daily and adoptions increase daily. It still underperforms in the number of transactions it process when compared to conventional currency-based payment systems. Due to problems associated with scaling, cryptocurrency as a payment option just can't compete with these traditional currencies.

Issues relating to cybersecurity - Anonymity being a major feature of cryptocurrency may seem to have done more harm than good over the years. As technological innovations evolve alongside cryptocurrencies, there have been many major cybersecurity breaches relating to hackers and terrorist groups as well. Since cryptocurrency offers a confidential decentralized system of operation, this is evident through multiple ICO breaches over the years costing millions of dollars.

Lack of intrinsic value - This is another argument made by billionaire Warren Buffet. Due to the price volatility of cryptocurrencies and their lack of tie to an inherent value, it's seen as a gloomy investment that may erupt and go away at any time. Most of the moves that happen in the market are fueled by fear and greed and not regulations.

How major problems with cryptocurrency can be handled? Let this be a response to the downsides highlighted earlier.

Major problems in the cryptocurrency space as highlighted above also have solutions and interestingly some of these solutions have been put into place.

Concerning the issue of scalability, several measures have been put in place to improve its issues. Some of these include sharding which is a way of distributing data across different operations to reduce the workload. This is very helpful in high throughput transactions that may naturally cause a strain on the network. Another solution include the concept of the lightning network.

The Lightning Network is a layer technology that sits just above Bitcoin Technology and is designed to address scalability and network congestion difficulties in this network. The lightning network was created to solve this problem by establishing a secure channel between nodes that allowed it to do off-chain transactions. Parties can move funds indefinitely without causing the main chain to be notified. As a result, the stress that would have been imposed on nodes by transaction approval inside the main chain is minimized, resulting in enhanced throughput and transaction speed.

Also, the issue of lack of intrinsic value has been tackled by the adoption of Central Bank Digital Currencies (CBDCs) which tie the value of a digital currency to the conventional currency operating in a country or region. This way, digital currencies may no longer be viewed as a bubble waiting to burst but can become widely adopted.

belief in the future of cryptocurrency plus recommendations

I am confident in the future of cryptocurrency. The past few years have made a significant contribution to the overall growth of cryptocurrencies. During the Covid- 19 pandemic, cryptocurrencies were widely used to facilitate transactions and have now become a household term.

We've seen how quickly the NFT space has grown in recent months, and how recent integrations like the metaverse, which may be one of the most important breakthroughs ever with the various integrations it houses, and the web3, which aims to be the decentralized internet of the future, have accelerated that growth. Analysts and crypto believers have recently begun to play with numbers, firmly believing that the cryptocurrency market cap will exceed $5 billion by 2030. Of course, this is entirely feasible.

It's important to note that cryptocurrency's future is bright and that it's here to stay, but there will always be bumps in the road for any major development that hopes to thrive in our current world, and that's exactly what the crypto market is going through right now. I always tell people not to join the worry train "Take a step back and look at it from a different angle. The hourly chart will never be able to tell the story of the yearly charts ". However, keep in mind that cryptocurrencies are extremely volatile, so only invest after conducting thorough research.

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Conclusion

New innovations thrive in the crypto space every day, rather than key into the potential downsides they inhabit, it's important to recognize them and use that as a guide to doing your adequate research(DYOR). The beginnings of every working system that ever thrived were never perfect.