What will the future of money look like? Imagine entering a restaurant and looking at the digital menu board for your favorite combined meal. Only, instead of being priced at $ 8.99, it is shown as 009 BTC.
Can cryptocurrency really be the future of money? The answer to that question depends on a general consensus on several key decisions ranging from ease of use to safety and regulation.
Let’s examine both sides of the (digital) coin and compare and compare traditional fiat money with cryptocurrency.
The first and most important component is trust.
It is imperative that people trust the currency they use. What gives the dollar its value? Is it gold? No, the dollar has not been backed by gold since the 1970s. So what is the value of the dollar (or any other fiat currency)? The currency of some countries is considered more stable than others. After all, people’s trust is that the government that issued the money stands firmly behind it and essentially guarantees its “value”.
How does trust work with Bitcoin since it is decentralized, meaning that their body is not a governing body that issues coins? Bitcoin is on the blockchain which is basically an online bookkeeping book that allows the whole world to see every transaction. Each of these transactions is verified by miners (people who use computers on an equal footing) to prevent fraud and ensure that there is no double spending. In exchange for their blockchain integrity services, miners receive payment for each transaction they verify. Since there are countless miners trying to make money, each checks each other for mistakes. This proof of workflow is the reason why the blockchain was never hacked. In essence, this trust is what gives Bitcoin value.
Then let’s look at the closest friend of trust, security.
How about if my bank is robbed or there is fraudulent activity on my credit card? My bank deposits are covered by FDIC insurance. Chances are my bank will also cancel all charges on my card that I never made. This does not mean that criminals will not be able to perform stunts that are frustrating and time-consuming to say the least. It is more or less peace of mind that comes from knowing that I will most likely be healed from any wrongdoing against me.
In crypto, there are many choices when it comes to where to store your money. It is important to know whether the transactions are insured for your protection. There are reputable exchanges such as Binance and Coinbase that have proven records of correcting injustices for their clients. Just as there are fewer reputable banks around the world, the same is true for cryptocurrencies.
What happens if I throw a twenty-dollar bill into the fire? The same goes for cryptocurrencies. If I lose my credentials to sign up for a particular digital wallet or exchange, then I will not be able to access those coins. Again, I cannot stress enough the importance of doing business with a reputable company.
The next question is scaling. Currently, this could be the biggest hurdle preventing people from conducting multiple blockchain transactions. When it comes to transaction speed, fiat money moves much faster than crypto. Visa can process about 40,000 transactions per second. Under normal circumstances, a blockchain can only handle about 10 per second. However, a new protocol is being adopted that will increase this to 60,000 transactions per second. Known as the Lightning Network, it could result in the conversion of cryptocurrencies into the future of money.
The conversation would not be complete without talking about the benefits. What do people usually like in their traditional methods of banking and spending? For those who prefer cash, it is obviously easy to use most of the time. If you are trying to book a hotel room or rent a car, you need a credit card. I personally 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 as well? Monaco is now issuing cards with the Visa logo that automatically convert your digital currency into local currency for you.
If you have ever tried to send money to someone, you know that this process can be very tedious and expensive. Blockchain transactions allow the user to send cryptocurrencies to anyone in just a few minutes, no matter where they live. It is also much cheaper and safer than sending a bank transfer.
There are other modern methods of money transfer that exist in both worlds. Take, for example, apps like Zelle, Venmo and Messenger Pay. These applications are used daily by millions of millennials. Did you also know that cryptocurrencies are starting to be embedded?
The Square Cash app now includes Bitcoin, and CEO Jack Dorsey said, “Bitcoin doesn’t stop us from buying and selling. We believe this is 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 gain access to the financial system.”
While it is clear that fiat spending still dominates the way most of us transfer money, the new crypto system is quickly getting hit. Evidence is everywhere. Prior to 2017, it was difficult to find media coverage. Now almost every big business news item covers Bitcoin. From Forbes to Fidelity, they all weigh their opinions.
what is my opinion Perhaps the biggest reason why Bitcoin could succeed is because it is honest, inclusive, and provides financial access to more people around the world. Banks and large institutions see this as a threat to their existence. They are at the losing end of the greatest wealth transfer the world has ever seen.
Still undecided? Ask yourself this question: “Do people trust governments and banks more or less every day?”
Your answer to that question may be what determines the future of money.