What will be the future of money? Imagine that you are entering a restaurant and you are looking at a digital menu bar for your favorite food. It is shown as 009 BTC, not just $ 8.99.
Can cryptocurrency really be the future of money? The answer to this question depends on the general consensus on several key decisions, from ease of use to safety and regulations.
Let’s explore both sides of the (digital) coin and compare and contrast traditional fiat currencies with cryptocurrencies.
The first and most important component is trust.
It is important that people trust the currency they use. What gives the value of the dollar? Is it gold? No, the dollar has not been backed by gold since the 1970s. So what gives value to the dollar (or any other fiat currency)? The currencies of some countries are considered more stable than others. Finally, people’s belief is that the government that issues the money stands firmly behind it and essentially guarantees its “value.”
How does trust work with Bitcoin because it is decentralized, not the governing body that issues their coins? Bitcoin sits on a blockchain, which is basically an online accounting book that allows the whole world to see every transaction. Each of these operations is checked by miners (people who run computers on a peer-to-peer network) to prevent fraud and also to ensure that there are no double costs. In exchange for blockchain integrity services, miners are paid for each transaction they check. Since there are countless miners trying to make money, each one checks each other’s mistakes. Proof of this workflow is that the blockchain has never been hacked. In fact, this belief is what gives Bitcoin value.
Then let’s look at security, which is the best friend of trust.
What if my bank was robbed or my credit card was forged? My bank deposits are covered by FDIC insurance. Most likely, my bank will refund any payments I have never made on my card. This does not mean that criminals will not be able to shoot at least annoying and time-consuming stuntmen. Most likely it is the comfort that comes from knowing that I will recover from any wrongdoing done to me.
There are many options for where to keep your money in cryptocurrency. It is important to know that transactions are insured for your protection. There are reputable exchanges like Binance and Coinbase that have proven experience to correct mistakes for their clients. Just as there are fewer reputable banks in the world, there is the same thing in cryptocurrency.
What if I throw a twenty-dollar bill into the fire? The same goes for cryptocurrency. If I lose my credentials for a particular digital wallet or exchange, I will not be able to gain access to those coins. Still, I can’t emphasize enough the importance of working with a reputable company.
The next issue is scale. At the moment, this may be the biggest obstacle that prevents people from doing more transactions on the blockchain. As for the speed of transactions, fiat money moves faster than cryptocurrency. Visa can handle about 40,000 transactions per second. Under normal conditions, the blockchain can handle only 10 per second. However, a new protocol will come into force, which will increase it to 60,000 operations per second. Known as the Lightning Network, this could result in cryptocurrency becoming the future of money.
The conversation would not end without talking about comfort. What do people usually like about traditional banking and spending methods? It is very easy to use for those who prefer cash. If you are trying to book a hotel room or a rental car, you need a credit card. Personally, I use my credit card wherever I go for convenience, security and rewards.
Did you know that there are companies that provide all this in the crypto space? Monaco now issues Visa logo cards that automatically convert your digital currency into local currency.
If you’ve ever tried to transfer money to someone, you know that the process can be very tedious and expensive. Blockchain operations allow the user to send cryptocurrency to anyone in a few minutes, regardless of where they live. It is also much cheaper and safer than sending bank money.
There are other modern money transfer methods available in both worlds. Take, for example, programs such as Zelle, Venmo and Messenger Pay. These programs are used by millions of people every day. Did you know that they are also starting to integrate cryptocurrencies?
The Square Cash program now includes Bitcoin, and CEO Jack Dorsey said: “Bitcoin doesn’t stop at buying and selling for us. We believe it’s a transformation technology for our industry and we want to learn as soon as possible.”
He added, “Bitcoin offers an opportunity for more people to enter the financial system.”
While it is clear that Fiat costs still dominate most of our money transfers, the new crypto system is gaining ground. Evidence is everywhere. Before 2017, it was difficult to find coverage in the mainstream media. Now almost every big business news covers Bitcoin. From Forbes to Fidelity, they are all measured by their opinions.
What is my opinion? Perhaps the biggest reason for Bitcoin’s success is that it is fair, comprehensive, and financially accessible to more people around the world. Banks and large institutions see this as a threat to their very existence. They are on the losing side of the world’s largest wealth transfer so far.
Still undecided? Ask yourself, “Do people trust governments or banks more or less every day?”
Your answer to this question may be something that determines the future of money.