From one of the most disrupting financial innovations at the start of the 21st century, cryptocurrency turned into a technology system that is decentralized in nature and guarantees unprecedented transparency, safety, and inclusiveness to break traditional banking monopolies. Although Bitcoin, the first cryptocurrency, had been born in 2009 as some sort of response to the global financial crisis, its rapid adoption spurred the development of thousands of other digital currencies vying for a way to change global finance. But with the rise in the use of cryptocurrency, pressing questions also arise about its long-term viability and the risks it brings.

Basic cryptocurrency rests on the block chain technology: a kind of virtual ledger kept across a network of computers. It is this very decentralization that eliminates intermediaries, like banks, because the individual now assumes full control over their assets. To many people, this is financial freedom, particularly where access to banking systems may not exist or are highly unreliable. In those countries that have been plagued by continuous economic turmoil or even with hyperinflation, these cryptocurrencies, such as Bitcoin, have become a haven of refuge whereby people protect their wealth in ways that the local currencies cannot.

Another big advantage is that people can make fast and low-cost transactions. The conventional systems of cross-border payments have always been slow and expensive, passing through intermediaries charging high fees. Cryptocurrencies route around most of these problems and allow users to easily move money in near real time, no matter where in the world an individual may be. In that manner, it has revolutionized industries such as remittances, where migrants can send money back home at lower costs and benefit millions around the globe.

But cryptocurrencies have also opened up new vistas for new financial systems. Generally called DeFi, decentralized finance enables users to lend, borrow, and trade in a manner that is independent of any centralized institutions. These are powered by smart contracts, basically self-executing agreements encoded on the blockchain. DeFi democratized access to financial services because more power over their finances was given to the people rather than traditional gatekeepers.

But the rise of cryptocurrency is not without its hiccups. Perhaps the most overriding cause for concern is its extreme price volatility. Bitcoin, for example, has traversed a precariously wide corridor of volatility in its journey, rendering it incapable of being a store of value to many. While early adopters might have reaped phenomenal benefits, these oscillations have subjected ordinary investors to enormous risk. This has thus freed the criticism that cryptocurrency is more close to a casino than any stable system of finance due to the speculative nature of the market.

Another no less important issue is regulatory uncertainty with regard to cryptocurrencies. Various governments have reacted in very different ways: from the complete ban on such money to enthusiastic adoption. This inconsistency provides complications for businesses and people that want to use digital currencies. Though some view regulation as a killer of innovation, others claim it to be a precondition for consumer protection and market stability.

But environmental issues have also tainted cryptocurrency. Mining is a power-intensive process of solving complicated mathematical problems in order to validate transactions. If the electricity comes through fossil fuels, it creates an environmental impact. Certainly, critics say, this is an industry that needs to clean up its act if it’s to match global ambitions on action on climate change.

Another hotly debated topic is security. Though the technology of the blockchain itself is highly secure, the wide environment is susceptible to hacking and fraud. Several high-profile scandals involving the collapse of major exchanges have caused losses amounting to billions of dollars. The pseudonymous nature of cryptocurrency transactions has attracted a lot of criminal activities; it facilitates activities such as money laundering and tax evasion.

Given the painful experiences illustrated above, it would be foolhardy to rule out the ability of cryptocurrency to change the face of world finances. Empowerment to the individual, reduced intermediaries, and innovation have already begun to remake industries. As technology evolves, solutions to its current limitations may appear that could allow broader acceptance.

The hybrids represent a vision of the future whereby decentralized virtual currencies coexist and operate with such systems as government-backed digital currencies. A host of countries, from China to Sweden, is working on the development of CBDCs  that avail the advantages of digital transactions without giving up the control of the state. This hybrid system may foster the best of both worlds: innovation in cryptocurrency, balanced by stability from traditional finance.

Cryptocurrency stands at a crossroads. It can change the face of the financial world, but its risks are so numerous that they cannot be overlooked. It shall be conditional on how society handles the challenges while embracing its promise: a cornerstone of the future economy or just a mere speculative experiment. For now, cryptocurrency represents an exciting opportunity combined with a cautionary tale in the ever-changing story of money.