Cryptocurrencies have gained lots of traction over the past decade, becoming globally used payment methods. Retail shops, online stores, and entertainment hubs all accept Bitcoin, Litecoin, Ethereum, and other cryptocurrencies. Stablecoins like Tether also attract those seeking FIAT-tied digital currencies with lower volatility.
Although crypto is recognized and used by millions of people, the option is a few years from replacing conventional FIATs that dominate the FOREX market. Many coins have disappeared and the volatility of leading cryptos like Bitcoin is still an issue. However, some have shown stability and are the go-to option when such currencies overtake FIAT. Here’s a look at three:
Bitcoin (BTC)
As the pioneer that never fades, Bitcoin is the leading cryptocurrency and most recognized worldwide. Bitcoin is used by millions of people across various sectors, including on betting sites that accept crypto payments, education centers, and online marketplaces. It is a popular choice for placing wagers on football, basketball, baseball, hockey, soccer, eSports, virtual sports, and more. Customers also use Bitcoin payments to pay for digital products and tangible goods and services. The coin has proven its worth for more than a decade and continues to solidify its position as digital gold, driven by its limited supply of 21 million coins, which ensures scarcity.
The coin provides a hedge against FIAT currency devaluation during inflation and global economic uncertainties. Bitcoin also boasts robust cryptographic security that makes it a strong store of value. It remains the most traded crypto, with the best liquidity and market capitalization, and analysts predict its value will continue to grow. The existing infrastructure also allows BTC to enjoy faster processing times and large transactions. More countries are adopting cryptocurrencies, and Bitcoin leads the pack in each jurisdiction. Countries like El Salvador and the Central African Republic have already adopted it as legal tender and global businesses also accept BTC in their trades.
Ethereum (ETH)
Since its introduction, Ethereum has cemented a second place in the crypto market capitalization. People almost always mention Ethereum within the context of Bitcoin or vice versa, which shows its prevalence in the financial markets. Transitioning to Ethereum 2.0 also made the cryptocurrency more scalable. Ethereum is more than just a currency. The infrastructure powers decentralized applications with its smart contracts capabilities and is also the technology behind non-fungible tokens and decentralized finance projects. Ethereum has found its place as the crypto behind the blockchain ecosystem and offers a platform for innovation in various projects.
By powering blockchain, Ethereum offers a platform for developing decentralized applications used in many industries, ranging from gaming to finance and education. Ethereum 2.0, which focuses on Proof of Stake (PoS) rather than Proof of Work (PoW), also cut down the blockchain’s energy consumption by more than 99%. This achievement enables Ethereum to handle more transactions and charge lower fees while addressing the most significant criticisms of blockchain. Like Bitcoin, Ethereum is recognized globally and has a decent market share compared to the other cryptocurrencies. Its value has also risen, though gradually, and is expected to keep growing as Bitcoin nears its 21 million cap.
Cardano (ADA)
While not as recognized as Bitcoin and Ethereum, Cardano is the next coin with a near realistic chance of replacing FIAT. Its layered architecture separates computation and settlement, providing a more secure and scalable design that can handle increasing transaction volumes at the same efficiency. Cardano’s focus remains scalability, sustainability, and security, which are integral for large-scale and long-term global use. The cryptocurrency is still in development for full-scale adoption as its architecture is built on rigorous steps involving academic research, peer-reviewed development, and methodical approaches. This gives the crypto a robust and sustainable technology that supports interoperability. The coin has seen some traction among emerging markets, academic sectors, decentralized applications, and long-term investors.
Apart from functioning as a currency, Cardano offers a blockchain system that allows developments across various industries. The crypto introduced Cardano Hydra, a layer 2 scaling solution that allows thousands of transactions to be processed per second. This update offers near-instant transactions and minimal fees, making it more scalable and sustainable for enterprise-level applications. Cardano also offers a platform for resolving real-world challenges in supply chain management, education, healthcare, and other sectors. Some governments and organizations have already partnered with Cardano to provide blockchain-based solutions for monitoring supply chains, tracking goods, managing identity systems, and verifying education and certification credentials.
The Future of Crypto as Global Currencies
Many other cryptocurrencies, including Solana (SOL), XRP (Ripple), and USD Coin (USDC), are contenders for aiding the transition from traditional paper currencies. Options like USDC are pegged to the dollar value, giving them more stability while providing the benefits of a blockchain ecosystem. The success of cryptocurrencies as future currencies hinges on various factors, from scalability and regulation to mainstream adoption.
Bitcoin and Ethereum are the two obvious candidates for crypto, while USDC offers a reliable stablecoin immune to volatility. All are decentralized alternatives to FIAT. Some nations are already exploring central bank digital currencies, highlighting the imminent shift toward cryptocurrencies. As blockchain and other technologies evolve, cryptocurrencies will transform into global modes of exchange, besides serving many other purposes impossible with FIAT.