Are cryptocurrencies ready to become mainstream?


“The 360” presents a variety of perspectives on the day’s top stories and debates.

what’s happening

Coinbase, the platform used to buy and sell cryptocurrencies, became the first major cryptocurrency company to go public on the US stock market last week. This list is a milestone for the cryptocurrency industry, which plays an increasingly important role in the mainstream economy.

Cryptocurrencies are simply digital money. You can use it to buy things online, just as you would with a credit card. However, cryptocurrencies differ from traditional payment methods in an important way. These are not issued by the government and are decentralized. That is, data is shared across thousands of computers around the world, rather than a single network like a credit card database. Proponents of the most enthusiastic cryptocurrencies believe that technology will eventually replace traditional currencies like the US dollar and become the dominant way for people around the world to pay for goods and services.

At the moment, there are more opportunities to buy things in the real world using cryptocurrencies, but they are still very limited. Most cryptocurrency activities involve people who invest in the currency itself, such as stocks and commodities. These types of investments have brought enormous benefits to early investors. Bitcoin, the most popular and well-known cryptocurrency, has skyrocketed in value over the last few years. Once worth a fraction of a cent, the price of a single Bitcoin exceeded $ 60,000 earlier this month. The total value of all cryptocurrencies is estimated to be over $ 2 trillion.

Why there is a debate

The question of whether cryptocurrencies are becoming mainstream depends on how we define “mainstream.”

One area of ​​debate between economists and investors is how important the cryptocurrency market is in the broader investment climate. Optimists say there is little reason to believe that the cryptocurrency boom can slow down and accelerate as the public becomes more aware. Pessimists say the history of violent price volatility and uncertainty about real-world applications limits the number of investors who are willing to choose cryptocurrencies over stocks and commodities.

There is also disagreement as to whether cryptocurrencies are a true alternative to traditional money that the average person can spend in their daily lives. There have been some advances in this area. Electric vehicle company Tesla recently announced that it will accept Bitcoin as a vehicle payment. The digital payment app PayPal now allows users to own and purchase their own cryptocurrencies. But skeptics say there is a long way to go before cryptocurrencies threaten standard currencies. Others see real limits that can diminish future prospects, such as increased regulatory scrutiny and growing dissatisfaction with the industry’s environmental impact.

Outlook

Cryptocurrencies are gradually becoming mainstream

“Therefore, even if you think Bitcoin, cryptocurrencies, and blockchain are weird or confused, you should expect them to continue to sneak into your daily life.” — Rebecca Heilweil,

Cryptocurrencies stay here as an investment tool

“For the longest time, there were only a few investment options for people who wanted to go beyond their 401 (k) or savings account. Those with extra income are usually stocks, bonds. Today, many adults in the United States, especially Millennial and Gen Z, are finding grandpa options that are as relevant as phone books. ”— Will Johnson,

It will take a long time for them to become mainstream payment options

“It could take another decade to fulfill our industry’s biggest problem: technology is more than just a place to save money.” — Erin Griffith,

Bitcoin can never be more than an investment tool

“Bitcoin … has no intrinsic value. It never did, and never did. It’s a purely speculative asset, a private fiat currency, and its value is what the market says. That’s it. “— Willem H. Buiter,

In certain cases, cryptocurrencies may be better than cash

“When it comes to digital dollars, it’s probably the most useful for banks and businesses that send large sums of money around the world. But whether you’re paying rent or sending money to relatives abroad, it’s easy in your life. I think we will be able to do it. ”— Jen Wieczner,

The crypto market is destined to collapse

“The little guys aim to defeat the’club’by cotton ginning their currency and setting its value, rather than managing the money of others. For a while, they seem to be very, very rich. The rogue game finally looks like it’s been licked. The crypto market is going up steadily. … and … it will crash. Or that’s why the history of the market tells us. — Virginia Hefernan,

Cryptocurrencies are better than traditional money

“When designing today’s financial system from scratch, design a decentralized system that allows anyone to exchange value with others without intervention. In a nutshell, it’s cryptography. What is it? Therefore, it is more efficient, cheaper, and faster, which could move us into a world where transactions are executed without an intermediary. “— Gil Luria, Research Director at DA Davidson, said.

There is little evidence that cryptocurrencies can grow beyond their current user base

“It’s still struggling to figure out what Bitcoin is for. Bitcoin has been around for over a decade, but in almost every respect it’s inferior to dollars and credit cards. And there remains an inconvenient way to pay for things. In the United States it is mainly used by enthusiastic enthusiasts because most merchants do not accept it. “— Megan McCardle,

Environmental concerns limit cryptocurrencies unless they are resolved

“Many Bitcoin complaints have been exaggerated over the years, but the increased use of real physical resources (energy and computer chips) by cryptocurrencies can no longer be ignored. Bitcoin by the government If you want to avoid crackdowns, you need to move to a technology that doesn’t require a certain amount of resource consumption just to keep the price of the currency. “— Noah Smith,

Even if cryptocurrencies are widely accepted, it doesn’t make sense to use them

“I don’t think people are looking at it in terms of spending. People are still looking at it as an investment. Why do you want to use valuated assets in depreciable products? It doesn’t make sense.” — From cryptocurrency broker Eleesa Dadiani

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Photo Illustration: Yahoo News; Photo: Getty Images

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