Cryptocurrencies are growing exponentially. Over £1.6 trillion is the total market capitalization of all 4,000 cryptocurrencies. Unimaginable just a few short years ago.
Cryptocurrency users have exceeded 100 million and are continuing to grow. Several mainstream financial institutions have even adopted Bitcoin and other digital money based on this data.
In the coming five years, there are expected to be many changes. Consequently, it is imperative that you remain alert and aware. If you do not, your Bitcoin wallet balance may be in jeopardy. Here are a few trends you should consider if you are considering investing today.
Fees for transactions that are less expensive
The transaction fees associated with Bitcoin are likely to be your bane if you are an investor. Crypto networks become increasingly congested as the number of users grows. This leads to higher transaction fees.
The fees associated with Bitcoin are often prohibitive for new crypto users. Nevertheless, there are some positive developments. I begin by stating that, even today, there are methods by which a transaction can be made at a lower cost. There is a well-known strategy of waiting for the traffic to clear to a certain extent.
However, in terms of trends, that is not sufficient. Developers, miners, and users are all concerned about the increasing fee rates. Because of this, we are already seeing technological innovations that will have an impact on the cost of transactions.
An excellent example of this is the Lightning Network. A layer of scalability is placed on top of Bitcoin, and this helps to reduce congestion in the system caused by an excessive number of transactions. Furthermore, you will only be charged a fraction of what you would normally pay.
Even though the Lightning Network is still undergoing testing, it shows a significant trend. In the future, we may see other technologies that contribute to reducing crypto transaction fees.
Incorporating the 5G mobile network
Despite its many advantages, 5G technology remains underappreciated by many. Mobile network technology has entirely changed through this technology, which provides greater transmission speeds.
More importantly, there is a greater number of connected devices and a lower latency which represent an excellent opportunity for cryptocurrency.
Five-generation (5G) technology will impact how crypto mining is conducted, and how DeFi applications are developed. It can be concluded that the implementation of 5G will level the playing field since the internet speed will no longer be an issue.
Regulating Bitcoin became a hot topic when it really took off. Before 2012, most regulatory bodies did not know how to regulate cryptocurrencies.
In spite of this, many changes have been implemented since then. Bitcoin enjoyed an excellent year in 2017 and the era of government scrutiny began.
Particularly in the case of crypto taxes, the regulation was inevitable and may even be necessary. At present, cryptocurrency taxation does not pose a significant problem, but this is likely to change over time.
Consequently, that change may prompt the development of crypto harbours where users with significant holdings could relocate in order to avoid paying taxes.
A crypto-crisis looms
It’s true that talk of Bitcoin’s bubble bursting never ceases, and many have dismissed it as a scare tactic.
However, just because it hasn’t occurred yet does not mean we shouldn’t expect it to do so in the future. There have never been so many transparent, secure, and regulated crypto coins in the history of Bitcoin. The steady growth of cryptocurrency has created a number of problems we have not encountered before.
It is likely that the increased supply of coins in the financial sector will lead to a depreciation of Bitcoin. Even though crypto users continue to worry about an upcoming crisis, others have taken steps to limit the effects of the crisis.
In order to prevent any significant losses, it is imperative to develop a risk assessment model. Current risk assessment models need to be improved, as they are often based on guesswork.
Prepare yourself for the future of cryptocurrencies
A growing market for DApps, the tokenization of NFTs, and the emergence of new digital coins are other trends we might expect in the coming years. Although everything is changing so rapidly, it is likely that there will be many unexpected trends in the coming years.
Despite the volatility of cryptocurrency, we’re all accustomed to being surprised whenever something crypto-related happens.
Thus, it is worth keeping your eyes open. In the near future, Bitcoin wallet technology may look very different. There is a possibility that transaction fees may increase or decrease significantly. Regulations, taxes, and the advent of 5G will undoubtedly alter the landscape of cryptocurrencies.