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February 22, 2022

The Evolution of Cryptocurrency

The Beginning

Cryptocurrency has been around for quite some time now, but the first major milestone was when an individual, or a group of people, named Satoshi Nakamoto released the bitcoin algorithm. Bitcoin was the first standout peer-to-peer money transfer system in the new world of cryptocurrency. The entire concept behind bitcoin, and furthermore cryptocurrency as a whole, was to develop a decentralized means of payment with added layers of security and transparency. Since it's creation, cryptocurrency has undergone a significant evolution over time.

Crypto Expansion

Following the build-out of a successful peer-to-peer transfer system in Bitcoin, other alternative coins began to sprout up all over the place as well. In today’s world, you may know that Ethereum is one of the other largest coins around. Ethereum has placed itself as the leading network for NFTs, play-to-earn games, and other commodities that are being placed on the blockchain. However, with this popularity comes much higher fees for transactions than in the past, as things become more and more congested as time passes.

The Explosion

Nowadays, the adoption of cryptocurrency continues to rise. Countries around the world are beginning to adopt crypto as a main form of payment across the region. The most recent example of this phenomenon is when El Salvador announced that the country would begin holding bitcoin as an asset and using it across the country as a traditional means of payment. This continued to spur an already hot conversation around the globe about bitcoin and other coins push into the mainstream market. The market will continue to fluctuate, but hopefully, this progression within the industry continues to push the needle forward on what is possible within the industry.

What is Holding it back?

One of the largest concerns to the crypto market is its volatility. Since this industry is still in its infancy and the market cap of most coins is lower than a traditional stock on the exchange, the volatility of these assets can be incredibly high. It is not uncommon to see big losses and big gains over the course of mere weeks if you are an active investor in space. The massive fluctuation in price also makes it hard for businesses and governments to accept these as forms of payment since the value could change from one day to the next in a large fashion. Stable coins could be a positive solution to these stated pitfalls.

Back to Basics

As crypto continues to grow and major financial institutions and governments are becoming interested in the product, it can be unclear exactly how this will evolve going forward. Crypto was created with a few key goals in mind and it is important that the industry attempts to uphold those standards as it moves forward. Security, privacy, transparency, and all those culminating in a decentralized financial standard is where we are heading if this course stays true. Currently, the United States is debating on how to best regulate this market while also allowing for the main components of it to ring true throughout. So far, US regulators seem to be on board with allowing the freedom of the blockchain, as long as everything is still being observed and governed correctly. This means that although the blockchain will allow you to handle your transactions with a large amount of data privacy and security, you will still need to stay on top of your transactions and report your trading profits, or losses, on your taxes at the end of the year.

Crypto Taxes

With all that being said, If you do decide to jump into this world of crypto and even pick yourself up some tokens, you need to make sure that you have the proper tools on hand to help you manage your financial accounting needs. One of the best solutions for you will be Ledgible.

With Ledgible, you can report and keep track of your crypto transactions as you dive in to the crypto space with this new information. If you want to learn more about Ledgible and get started for free, click here.

Disclaimer: The author and Ledgible do not provide investment advice and nothing in this article is meant to be taken as such. This website is presented solely for informational and entertainment purposes and is not to be construed as a recommendation, solicitation, or an offer to buy or sell / long or short any securities, commodities, cryptocurrencies, or any related financial instruments.

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