The rise of cryptocurrencies has been significant and often volatile. The value of some of these currencies, such as Bitcoin and Ether, has, in the past, skyrocketed to eye-watering levels, only for the market to later contract.
Regardless of that volatility, cryptocurrencies seem to be here to stay. They’ve found a use in many different sectors and can now be used to purchase all manner of goods, from a Tesla car to a new house.
In this guide, we look at the impact these developments have had on the US. In particular, we examine the effect of two of the biggest crypto coins: Bitcoin and Ether.
First, let’s take a look at what cryptocurrencies are.
What are cryptocurrencies?
Cryptocurrencies are a new form of digital currency. Their two most distinguishing features are that they do not exist in the physical world. Firstly, they are virtual currencies that exist in virtual wallets, and secondly, they’re not governed or regulated by any one organization or country. This makes them decentralized, which has positive and some negative aspects.
Cryptocurrencies have become the go-to choice for purchases for a growing number of people. They offer complete anonymity when making a transaction. This means no personal information is shared. However, transactions are still recorded on something called a blockchain, which is a ledger that records all transactions. Once a transaction is completed, it cannot be amended and it remains on the ledger. This is all designed to ensure transparency and security.
Let’s take a look at two of the most popular cryptocurrencies right now.
Ethereum serves as a platform upon which developers can build and deploy decentralized applications and smart contracts. The currency used on this platform is called Ether.
Smart contracts are one of the defining features of Ethereum. They are self-executing and are automatically enforced when pre-agreed conditions are met. This ensures smooth, trusted and automated transactions.
Like Bitcoin, Ether is completely decentralized, meaning nobody can interfere with its operations. It’s also used for different transactions, such as on gaming platforms, for donations to charitable organizations and with various e-commerce stores.
Unlike Ethereum, Bitcoin is a cryptocurrency and is in fact the first one ever created. It is a decentralized currency that can be sent over the peer-to-peer Bitcoin network, which is secured by a blockchain ledger.
It shares many of the same features as Ether and other currencies, such as the ability to make anonymous transactions. Bitcoin also has a maximum supply of coins. The purpose behind this is to preserve its value. If there are too many in circulation, the value will diminish.
Nowadays, Bitcoin isn’t just used for transactions – it’s also used as an investment, like gold, with investors buying and selling it for profit.
What are cryptocurrencies used for?
Cryptocurrencies are simply another form of currency, like US dollars or Great British Pounds. They have scores of different uses. The very first transaction completed using a crypto coin was for a pizza. They have since been used in transactions ranging from buying cars and clothes to watches and real estate.
One industry that has embraced cryptocurrency is the world of online casinos. Some betting sites use crypto and nothing else. This means if you play roulette live, you’d win Bitcoins, for example, and are able to cash out your winnings directly into your crypto wallet.
The technology has allowed those who like to play casino games the ability to stay anonymous and to make immediate withdrawals. In contrast, some standard online casinos may take up to seven working days to process a withdrawal.
Other leading multinational companies have also embraced crypto. Coffee giant Starbucks, for example, recently partnered with a third-party company that will allow them to accept cryptocurrency payments.
Expedia is another large organization that accepts cryptocurrencies. It achieves this through its partnership with the cryptocurrency exchange Coinbase.
What impact have Ether and Bitcoin had on the US?
The impact of Ether and Bitcoin on the US cannot be denied. Given its interaction with several different sectors, these currencies have caused a stir not only in the technology and banking industries but have affected the economy as a whole.
One impact that they have had is in advancing the technologies used in the economy as a whole. The blockchain ledger offers an opportunity for many businesses and corporations to introduce the technology to help with the likes of supply chain management, data sharing and financial services.
This desire to use the blockchain has created a demand for this as a technology separate from cryptocurrencies. As a result, scores of startups have emerged to offer services to businesses. This has all helped spur on a wave of innovation in the US.
With innovation can come new startup companies and industries that can create swathes of new job roles.
Areas of the country, like Silicon Valley, have become global hubs of change, places that people relocate to so that they can contribute to the innovative work taking place. This has all helped to make the US a global leader in the world of cryptocurrencies.
What does the future hold for Ether and Bitcoin in the US?
Bitcoin and Ether are no strangers to volatility. The industry is renowned for price spikes and sudden falls. Sometimes this is down to external factors, and one of the biggest is the regulation of the market.
In the US, the government maintains loose control of the industry through agencies like the SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission). These institutions have launched litigation against a number of cryptocurrencies, such as XRP, which has impacted the price of those coins.
The uncertainty surrounding its regulation has hampered the growth of the crypto market. Also the collapse of FTX, one of the leading cryptocurrency exchanges, damaged confidence. This has led to funds drying up as investors turn their attention to safer bets.
Despite the challenges, cryptocurrencies continue to be popular. If the regulatory issues can be resolved, they will continue to grow.