Where will cryptocurrencies be in 5 or 10 years’ time? It’s a question many of us would like an answer to, but when we look at the volatility of the Bitcoin price over the last two years – rising astronomically from $900 to almost $20,000 in 2017, to the huge falls of 2018 that see the current price at around $4000 – it is incredibly hard to predict.
However, cryptocurrency is meant to be money, it is meant to be a unit to transfer value from one person to another for goods or services. Money is something that we, as people, need to be able to rely on. We need to know what its value is. We need to be able to trust it, and the only way we can have that trust is if its price is stable.
Having a stable price is the key, but how can it be created? To answer that question we must first say what it can’t be. For many, cryptocurrencies have become commodities to trade, buying and selling to play with the price. But in that comes the instability and volatility that prevents it from becoming a stable currency.
For government-backed currencies, often known as fiat currencies, their stability originally came from being backed by gold. However, today, this is no longer the case as currencies stability now comes from the size of the community using it and the economy of the country from which it is created and regulated.
However, for cryptocurrencies, the size of the communities using them still remains relatively small. In turn, they do not have a government, economy, regulation or gold to back them up, adding further to instability. Therefore, the only way to increase the stability of cryptocurrencies is to increase the size of the communities using them.
But just how do you do that? To increase the number of people using cryptocurrencies two things must be done. People must be able to trust the currency and they must be able to use it to buy goods and services.
The huge falls in the value of cryptocurrencies in the last year, as mentioned earlier, have done nothing to help build trust in mainstream society. With many people believing that those using and trading cryptocurrencies are just playing games with money, or worse, involved in pyramid schemes and illegal activities. For example, in September Josh Garza was sentenced to 21 months in prison and ordered to pay back over 9 million stolen as part of his PayCoin cryptocurrency Ponzi scheme. Likewise, many documentaries and news reports have been made about the use of Bitcoin on the dark web to buy drugs, arms, and even people, anonymously.
And, it is not just potential users that must trust a currency, businesses must as well. Bitcoin saw a number of large companies such as Microsoft, Subway and Virgin adopt the currency as a payment method. However, 2018 has seen a number of companies, including Expedia, remove it as a payment method.
Despite the negative year in the cryptocurrency market. The majority of people in society are aware of the huge benefits of using these currencies in their day to day lives, such as the very low charges for transferring money, the high speed of transactions anywhere in the world, as well as the fraud-proof and identity theft technologies incorporated into them. And herein lies the opportunity for cryptocurrencies to grow and become established as day to day currencies used by all. And, why building trust and providing the opportunities to use these to buy goods and services online is not just integral to their growth, but also their future stability.
It’s not possible to build up something very big, like an established currency overnight or within half a year, or a year. This is why cryptocurrencies have been slowly growing for the past decade and will likely continue to do so for the next years. In some countries, it may even be up to 20 years before they fully understand, adapt and adopt them.
Many commentators and investors are stating that the period for early adopters in the cryptocurrency market is over. And yet, how can this be when still so few people own them and even fewer use them for their intended purpose, to buy goods and services.
It is exactly for this reason as well as those stated above that anyone entering the cryptocurrency market today is still an early adopter and will continue to be so for quite some time ahead. If you thought you had missed the boat, we can assure you, you haven’t.
But just what kind of cryptocurrency should you invest in? The best way to answer this question is to start by telling what not to invest your hard earned money in to. Any currency that promises exceptional growth and guaranteed quick profits! These kinds of currencies are marketed purely for those who wish to invest and play with their money and have no intention of being used as actual money to buy things, meaning that those currencies will never be adopted by the majority of society. At the extreme of these investment products are Ponzi and pyramid schemes built on fictional currencies. These must be avoided at all costs.
The currencies to invest in – very simply – are those that are looking into the long term. Perhaps 5 or even 10 years ahead – just as Dagcoin. Developing strategies to increase trust in the currency as well as providing and promoting ways to buy and sell products and services using it. These do not just have the possibility to become mainstream currencies used by many in society every day, but also to generate profits for those who invest and early.
So, where will the cryptocurrency market be in 5 to 10 years from now? The future depends on how they are used. Currencies are meant to be used to buy and sell things, not as investment products to be bought and sold for profit. It is the latter which has caused such volatility in cryptocurrency prices over the past two years.
The majority of the population are very aware of the benefits of using cryptocurrencies such as the speed, low cost and security of payments, but they are put off by instability in the value of currencies and negative news reports about how these currencies can be used for illegal activities.
The only way for cryptocurrencies to grow and become adopted by mainstream society is by building trust and making it possible to use them to buy products wherever people go or shop. Those currencies that achieve this will see great growth and adoption in the years to come.
The vision of Dagcoin is clear as it is to disrupt the financial world by becoming the global crypto of the future. This can only be done with the long-term mindset and having loads of patience.
Nils Grossberg is an entrepreneur from Tartu, Estonia. Nils Grossberg graduated from the University of Tartu with a bachelor’s degree in History. He is the co-founder and former CEO of Dagcoin OÜ, the software company behind the development of Dagcoin cryptocurrency and its ecosystem.