What will be the future of money? Imagine going to a restaurant and looking at a digital menu board for your favorite combo dish. It is shown as 009 BTC instead of just $ 8.99.
Can crypto really be the future of money? The answer to this question depends on a general consensus on several key decisions, from ease of use to safety and regulations.
Let’s look at both sides of the (digital) coin and compare traditional fiat money to cryptocurrency.
The first and most important component is trust.
It is important that people trust the currency they use. What is the value of the dollar? Is it gold? No, the dollar has not been backed by gold since the 1970s. What is the value of the dollar (or any other Fiat currency)? The currencies of some countries are considered more stable than others. As a result, it is people’s belief that the government that gave the money is behind it and, in essence, guarantees its “value.”
How does trust work with Bitcoin because it is decentralized, not a governing body that issues coins? Bitcoin sits in a blockchain, an online accounting ledger that allows you to see every transaction around the world. Each of these operations is approved by the miners (people working on a computer on a peer-to-peer network) to prevent fraud and ensure double spending. In return for block chain integrity services, miners are paid for each transaction they verify. Since there are countless miners trying to make money, each of them investigates each other’s mistakes. This proof of the workflow is that the blockchain is never hacked. In fact, it is this trust that gives Bitcoin value.
Then let’s look at the security, the closest friend of trust.
What if my bank is robbed or my credit card is fraudulent? My bank deposits are covered by FDIC insurance. My bank is likely to refund all payments I have never made on my card. This does not mean that criminals will not be able to shoot at least nervous and time-consuming stunts. Most likely, the comfort that comes from knowing that I will get rid of any sin committed against me.
There are many options on where to store your cryptocurrency. It is important to know if the transactions are insured to protect you. There are reputable exchanges like Binance and Coinbase that have a proven experience to correct mistakes for their clients. Just as there are fewer reputable banks around the world, there is the same thing in cryptocurrencies.
What if I fire a twenty-dollar bill? The same goes for cryptocurrency. If I lose or exchange my credible documents in a certain digital wallet, I will not be able to gain access to those coins. Again, I can’t stress enough about the importance of working with a reputable company.
The next issue is scaling. At present, this may be the biggest obstacle that prevents people from doing more operations in the blockchain. When it comes to transaction speed, fiat money moves faster than crypto. Visa can handle about 40,000 transactions per second. Under normal conditions, the blockchain can only run for 10 seconds. However, a new protocol is being adopted that will increase it to 60,000 operations per second. Known as the Lightning Network, it could become the future of cryptocurrency.
The conversation would not end without talking about comfort. What do people like about traditional banking and spending methods? 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 a rental car, you will need a credit card. Personally, I use my credit card wherever I go because of my convenience, security and reward.
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 for you.
If you have tried to transfer money to someone, you know that this process can be very tedious and expensive. Blockchain transactions allow a user to send a crypto to anyone in just a few minutes, regardless of where they live. It is also much cheaper and safer than sending money to the bank.
There are other modern methods for money transfers available in both worlds. Take apps like Zelle, Venmo and Messenger Pay, for example. These programs have been used daily for millions of years. Did you know that they also started using cryptocurrencies?
Square Cash’s application now includes Bitcoin, and CEO Jack Dorsey said: “Bitcoin doesn’t stop with buying and selling for us. We believe it’s a transformational technology for our industry and we want to learn as soon as possible.”
“Bitcoin offers an opportunity for more people to enter the financial system,” he said.
While it is clear that Fiat’s costs still dominate the way most of us move money, the emerging crypto system is growing rapidly. Evidence is everywhere. Prior to 2017, it was difficult to find information in the general press. Now, almost every major business news outlet covers Bitcoin. From Forbes to Loyalty, everyone is overwhelmed by their thoughts.
What is my opinion? Perhaps the biggest reason Bitcoin can be successful is that it is fair, inclusive, and gives financial access to more people around the world. Banks and large institutions see this as a threat to their existence. They are at the point where the world’s largest transfer of wealth has been lost.
Still undecided? Ask yourself, “Do people trust governments and banks more or less every day?”
The answer to this question can only determine the future of money.