Short Answer: Given the world’s rapid digitalization, it seems highly likely that some form of cryptocurrency will have a significant role in the future; however, it remains to be seen if Bitcoin, the most established cryptocurrency, will retain its dominant position in the market.
Longer Answer: For starters, cryptocurrency is a digital currency that is protected by encryption. A bitcoin, for example, is simply a string of numbers and letters that can be validated by the blockchain database. Blockchain technology is the foundation of cryptocurrency; it’s essentially a way of storing information in a database that prevents people from tampering with it or exercising control over the entire database. Many proponents of blockchain technology see a host of potential uses, particularly in the financial industry; contracts could be stored in an immutable blockchain database without having to go through a bank or middleman. This removal of the middleman is one reason skeptics believe governments will move in to regulate the cryptocurrency market; for hundreds of years now, national currency has been backed by the integrity of the government, but cryptocurrency is wholly removed from any government control. Already China has moved against cryptocurrency by prohibiting its banks and financial sector from offering services related to cryptocurrencies. Bitcoin, and cryptocurrencies in general, exploded in popularity in early 2021 as its price climbed as high as $62,000; however, prices have since fallen to around $35,000 per bitcoin. That volatility is another reason for skepticism; after all, who wants to use a currency that fluctuates 300% in just a few months? In all likelihood, governments across the world will move in to regulate the cryptocurrency market, which is often used to launder money and facilitate illegal commerce. However, blockchain technology has a lot of backers and is expanding past cryptocurrency, so I’m confident that it will continue to grow in popularity. There is a lot of popular support behind cryptocurrency, with even Elon Musk and Tesla buying and promoting bitcoin, but I believe that the “Wild West” of cryptocurrency will end soon and usher in the age of government-backed cryptocurrencies.