Many countries such as India, Indonesia, and Japan among others have endorsed the use of Bitcoin and Ripple, despite the lack of clear policies on the operations and sustainability of such new digital currencies. However, others, including China, have banned the entire crypto-mining phenomenon, hence blurring the future of Bitcoin and Ripple. Owing to the uncertainty concerning whether these two cryptocurrencies will ever be vital financial assets, this article argues that more countries are expected to emulate China’s move to the extent that Bitcoin and Ripple will be useless in the next half a century.
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According to Chancellor, the state theory presents currency as a form of credit given by a country, owing to its value that is derived from the fact that it can facilitate the reimbursement of taxes. Capitalist economies, many of which are highly industrialized and powerful, for instance, the U.S., the UK, Japan, Brazil, and South Korea among others, are characterized by a huge system of credit connections (Matsuura 7). Hence, the introduction of Bitcoin and Ripple as a form of cryptocurrencies that do not provide a means of establishing credit is expected to be outlawed in virtually all capitalist nations in the next 50 years since they will hinder the already highly developed and globally accepted credit culture.
Also, although the impact of broken global links following some countries’ move to endorse Bitcoin and Ripple will be gradual, the severity of the situation will be felt since issues such as “scarcity of the digital currency, a severe economic contraction, and stagnation without end” (Chancellor) will be inevitable. Based on this projection, it is crucial to point out that chances of the global community allowing transactions to be conducted using virtual currencies, specifically Bitcoin and Ripple, as opposed to money regulated by financial institutions, are significantly low. This claim holds since the already established international domination of money is almost impossible to substitute with any other form of digital currency, including Bitcoin and Ripple. According to Menegus, Bitcoin, and Ripple’s gradually declining return on investment implies that cryptocurrency companies’ business margin will tend to zero in the next 50 years. Hence, the two virtual currencies may never serve as important financial assets since many countries will have implemented China’s strategy of abolishing crypto-mining.
In an article by Kettley, the latest 50% drop in Ripple’s value in a record time of 7 days may be viewed as a signal that the virtual currency will crash within the next half a century. Ripple’s falling value has shaken shareholders’ confidence, including banks that had massively invested in the virtual currency, for instance, the Bank of America (Kettley). This volatility is expected to persist in the coming decades to the extent that it will not only scare away potential investors but also result in the quitting of the current ones. Extensive investment in Ripple may never be realized, owing to its unsteadiness. Consequently, as Orcutt asserts, the number of investors who embrace this school of thought is projected to rise to the extent that a mass exit may be inevitable in the coming five decades, despite Brad Garlinghouse’s (the company’s boss) statement that financial institutions are currently heightening their transactions with Ripple.
Conclusively, the rising need for efficient, secure, and convenient transactions has led to the establishment of cryptocurrencies such as Bitcoin and Ripple. These digital currencies are deployed as a property operating as a medium of exchange. However, the paper has argued that their instability and capitalist nations’ monopoly of money, which they are not ready to let go, will render Bitcoin and Ripple insignificant financial assets in the next 50 years.
Chancellor, Edward. “Breakingviews – Chancellor: Bitcoin will Never be Real Money.” Reuters, 2018, Web.
Kettley, Sebastian. “Ripple price: Why is Ripple Crashing on the Markets? XRP Down 50% on Record High.” City & Business News, 2018, Web.
Matsuura, Jeffrey. Digital Currency: An International Legal and Regulatory Compliance Guide. Bentham Science Publishers, 2016.
Menegus, Bryan. “China’s Crackdown on Crypto-Mining Threatens Bitcoin’s Future.” Gizmodo, 2018, Web.
Orcutt, Mike. “No, Ripple Isn’t the Next Bitcoin.” MIT Technology Review, 2018, Web.