If you have ever been tempted to ask: “What’s so great about cryptocurrency?”, you are not alone. Wall Street luminaries such as Bernard L. Baumohl of the Economic Outlook Group, Walter Heller of Heller Investments, and Jon Kedrowski of PwC say cryptocurrency cannot take over the world just yet. But if this is indeed the cryptocurrency market’s upcoming demise, and the United States is no longer a true leader in crypto, whose role is supposed to be to hold the reins, it is worth asking: What was all that about?
In fact, the U.S. isn’t holding much sway on this in the first place. There have been more coins minted in recent years than in its entirety previous history. A McAfee whitepaper from earlier this year said that 650 billion new blocks of currency would be created each year. Before that, it was only 140 billion.
That is a dramatic shift. But the money has not been moving easily. A research report in 2015 published by Canaccord Genuity said that ether and litecoin — the bitcoin rival that is now most closely followed by bitcoin fans — had been shot out of the gun in relative terms as more and more crypto currency was launched each month.
The American dollar is not about to disappear as a currency in the course of this shift, but its decentralized nature means it will have to fundamentally change in order to be able to anchor its place in the cryptocurrency market.
The utopian promise of cryptocurrency was about turning the idea of hypercapitalism into a reality. It was about “the power of decentralization,” or what cryptocurrency proponents call “the network effect.”
By definition, there is no central authority that can regulate cryptocurrency – and no centralized “economic basket” that controls a currency’s value. The blockchain technology that made cryptocurrencies possible has at its core three main components: a ledger system that records transactions and records the move of assets across the network, decentralization, the peer-to-peer nature of peer-to-peer financial markets, and cryptography.