What will the future of money look like? Imagine entering a restaurant and looking up at the digital menu dashboard of your favorite combination dish. Only, instead of being priced at $ 8.99, it shows up as 009 BTC.
Can cryptography really be the future of money? The answer to this question depends on a general consensus on several key solutions, ranging from ease of use to security and regulation.
Let’s look at both sides of the (digital) coin and compare and contrast traditional fiat money with cryptocurrency.
The first and most important component is trust.
It is imperative that people believe in 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 is it that gives value to the dollar (or any other fiat currency)? The currency of some countries is considered more stable than others. After all, it is people’s trust that the government that issues this money stands firmly behind it and essentially guarantees its “value”.
How does bitcoin trust work once it is decentralized, which means that they are not a governing body that issues coins? Bitcoin is housed in a blockchain, which is essentially an online ledger that allows the whole world to see every transaction. Each of these transactions is checked by diggers (people working with computers in a network of equal partners) to prevent fraud and also to ensure that there are no double costs. In exchange for their services to maintain the integrity of the blockchain, miners receive payment for each transaction they verify. Because there are countless miners trying to make money, everyone checks their work for mistakes. This proof of workflow is the reason why the blockchain has never been hacked. In essence, this trust is what gives value to bitcoin.
Then let’s look at the closest friend of trust, security.
What would you say if my bank was robbed or my credit card was fraudulent? My deposits in the bank are covered by FDIC insurance. Probably my bank will also cancel all the fees on my card that I have never made. This does not mean that criminals will not be able to perform stunts that are at least frustrating and time consuming. This is more or less the peace of mind that comes from knowing that I will most likely recover 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 if the transactions are insured for your protection. There are reputable exchanges like Binance and Coinbase that have proven experience in correcting mistakes for their clients. Just as there are fewer reputable banks around the world, the same is true for crypto.
What if I toss a twenty-dollar bill into the fire? The same goes for crypto. If I lose my digital wallet or exchange credentials, I will not be able to access these coins. Again, I can’t stress enough the importance of doing business with a reputable company.
The next problem is scaling. Currently, this may be the biggest obstacle preventing people from making more transactions in the blockchain. In terms of transaction speed, fiat money moves much faster than crypto. Visa can process about 40,000 transactions per second. Under normal circumstances, the blockchain can only process about 10 per second. However, a new protocol is being introduced that will increase the speed to 60,000 transactions per second. Known as the Lightning Network, it could turn crypto into the future of money.
The conversation would not be over without convenience. What do people usually like about 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 car rental, then 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 is already issuing cards with the Visa logo, which automatically convert your digital currency into the local currency for you.
If you have ever tried to transfer money to someone, you know that this process can be very tedious and expensive. Blockchain transactions allow the user to send crypto to anyone in just minutes, no matter where they live. It is also significantly cheaper and safer than sending a bank transfer.
There are other modern methods of money transfer that exist in both worlds. Take applications such as Zelle, Venmo and Messenger Pay. These applications are used by millions of millennials every day. Did you also know that they are starting to include crypto?
The Square Cash app now includes bitcoin, and CEO Jack Dorsey said: “Bitcoin keeps buying and selling for us. We believe this is a transformative technology for our industry and we want to learn as quickly as possible. ”
He added: “Bitcoin offers the opportunity to get more people access to the financial system.”
While it is clear that Fiat spending still dominates the way most of us move money, the nascent crypto system is rapidly gaining ground. Evidence is everywhere. Prior to 2017, it was difficult to find mass media coverage. Now almost every major business news outlet covers bitcoin. From Forbes to Fidelity, they all weigh their opinions.
what is my opinion Perhaps the biggest reason Bitcoin can succeed is because it is fair, inclusive, and financially accessible to more people around the world. Banks and large institutions see this as a threat to their very existence. They are at the losing end of the greatest wealth transfer the world has ever seen.
Haven’t decided yet? Ask yourself, “Do people trust governments and banks more or less with each passing day?”
Your answer to this question may be what determines the future of money.