The issue of decentralization has been argued as a “false decentralization.” A large enough group of people verifying blockchain transactions does form a quasi-centralized entity. Those people are the miners, who validate the blocks in the public ledger and assign the blocks their unique codes, or hashes.
This argument is directly related to the 51% majority issue that plagues newer cryptocurrencies but becomes less of a problem over time.
Another issue that has been put forth is that the benefits of cryptocurrency either are not realistic or more efficient than traditional fiat currency.
An electronic transfer of funds for a real currency can occur in minutes. In contrast, many of the first cryptocurrency projects can take hours.
Some of the older crypto projects also require a lot of computational power, leading to high electrical consumption levels. Critics argue that this is an inefficient use of earth’s resources.
Recent developments have begun to work around the shortcomings of transaction times and energy consumption as add-ons to the established cryptos and new projects that do not contain the identified inefficiencies.
An interesting observation is that cryptocurrency isn’t really a currency due to its price volatility. Money must be a good store of value.
Some merchants or vendors may allow purchases for goods and services in crypto. They would need to adjust the real-world price being charged in tandem with the market value of whatever cryptocurrency is being used.
They argue that the point of any currency is to represent a relatively stable value. As adoption grows, the price should become more stable. Some cryptocurrencies are pegged to the value of a fiat currency like TrustTokens. Other projects are one-for-one representations of assets like gold and Tezos.
Cryptocurrency is a way for us to make electronic peer-to-peer transfers without the risk of a single entity gaining too much power over the monetary system.
The merits of cryptocurrencies are still in its early days. Early adopters and enthusiasts will continue to sing cryptocurrency’s praises. Pundits will continue to measure this new financial tool against established currencies and real money. The average consumer must decide when’s the right time to test how cryptocurrency fits into their lives.
As blockchain technology continues to mature, and the useful blockchains surface into the mainstream, the point of cryptocurrency and its place in your financial toolbox will inevitably become apparent.