What will the future of money look like? Imagine walking into a restaurant and looking up at the digital menu board of your favorite combination meal. Only, instead of its price of $8.99, it shows up as .009 BTC.
Can cryptocurrency really become the future of money? The answer to this question depends on the overall consensus of several key decisions ranging from ease of use to security and regulations.
Let’s examine the two sides of (digital) coins and compare and contrast traditional fiat currencies with cryptocurrencies.
The first and most important component is trust.
People must trust the currency they use. What gives the dollar its value? Is it gold? No, the U.S. dollar has not been backed by gold since the 1970s. So, what gives the dollar (or any other legal tender) value? The currencies of some countries are considered more stable than others. In the final analysis, people’s trust is that the government that issued this money firmly supports it and fundamentally guarantees its “value.”
Since Bitcoin is decentralized, how does trust work with Bitcoin, which means that Bitcoin is not the governing body for issuing coins? Bitcoin is on the blockchain, which is basically an online accounting ledger that allows the world to view every transaction. Each of these transactions is verified by miners (people who operate computers on a peer-to-peer network) to prevent fraud and ensure that there is no double spending. In exchange for their services to maintain the integrity of the blockchain, miners were paid for every transaction they verified. Since there are countless miners trying to make money, everyone will check each other’s work for errors. This proof-of-work process is why the blockchain has never been hacked. In essence, this trust is what gives Bitcoin value.
Next, let’s look at the friend who trusts the closest relationship, security.
What should I do if my bank is robbed or there is fraudulent activity on my credit card? My deposit in the bank is underwritten by FDIC insurance. It is very likely that my bank will also withdraw any charges on the credit card that I have never paid. This does not mean that criminals will not be able to obtain stunts that are at least frustrating and time-consuming. Knowing that I am likely to become complete by any misconduct against me is more or less peace of mind.
In cryptocurrency, there are many options for storing funds. It is imperative to know if you are insured for your transactions. There are well-known exchanges, such as Binance and Coinbase, which provide customers with a good track record of correcting mistakes. Just as there are not many reputable banks in the world, so are cryptocurrencies.
What if I throw a twenty-dollar bill into the fire? The same is true for encryption. If my login credentials are lost to a digital wallet or exchange, then I will not be able to access those coins. Again, I cannot emphasize the importance of doing business with well-known companies.
The next issue is expansion. Currently, this may be the biggest obstacle preventing people from making more transactions on the blockchain. When it comes to transaction speed, fiat currencies move much faster than cryptocurrencies. Visa can process approximately 40,000 transactions per second. Under normal circumstances, the blockchain can only process about 10 per second. However, a new agreement is being developed that will cause a surge in transactions of up to 60,000 transactions per second. Known as the Lightning Network, it could lead to making cryptocurrencies the money of the future.
If you don’t talk about convenience, the dialogue will be incomplete. Do people usually like traditional banking and spending methods? For those who like cash, it is obviously easy to use most of the time. If you want to book a hotel room or rent a car, you need a credit card. Personally, I use credit cards everywhere because of convenience, safety and rewards.
Do you know that there are companies in the cryptocurrency field that also provide all these functions? Monaco is now issuing Visa logo cards, which will automatically convert digital currency to local currency for you.
If you have ever tried to send money to someone, then you know that the process can be tedious and costly. Blockchain transactions allow users to send cryptocurrency to anyone in just a few minutes, no matter where they are. It is much cheaper and safer than sending bank wire transfers.
There are other modern methods of transferring funds in both worlds. Take apps such as Zelle, Venmo, and Messenger Pay as examples. These apps are used by millions of millennials every day. Did you know that they also started to merge cryptocurrencies?
The Square Cash app now includes Bitcoin, and CEO Jack Dorsey said: “For us, Bitcoin has not stopped buying and selling. We believe this is a transformative technology for our industry. , We hope to learn as soon as possible.”
He added: “Bitcoin provides an opportunity to make the financial system accessible to more people.”
Obviously, fiat currency spending still dominates the way most of us transfer money, and the fledgling encryption system is rapidly spreading. The evidence is everywhere. Before 2017, it was difficult to find mainstream media coverage. Now, almost every major business news media reports on Bitcoin. From “Forbes” to Fidelity, they are all involved.
What is my opinion? Perhaps the biggest reason for Bitcoin’s success is that it is fair, inclusive, and provides financial access to more people around the world. Banks and large institutions see it as a threat to their existence. They will stand at the end of the failure of the largest transfer of wealth in the history of the world.
Still undecided? Ask yourself a question: “Do people trust the government and banks more or less every day?”
Your answer to this question may be a factor that determines the future of currency.