What is the future of money? Imagine walking into a restaurant and looking at the digital menu board of your favorite combo meal. Only, instead of it being priced at $ 8.99, it is displayed as.009 BTC.
Could crypto be the future of money? The answer to that question depends on the general consensus on several key decisions from ease of use to security and regulations.
Let’s examine both sides of the (digital) coin and compare and contrast traditional fiat money with cryptocurrency.
The first and most important part is trust.
People have to trust the money they spend. What gives the dollar its value? Is it gold? No, the dollar has not been supported by gold since the 1970s. Then what gives the dollar (or any other fiat currency) value? The currency of some countries is considered stronger than others. Finally, people’s confidence that the issuing government of that money firmly stands behind it and essentially guarantees “value.”
How does trusting Bitcoin work because it is decentralized which means they are not a governing body that issues coins? Bitcoin sits on the blockchain that is essentially an online accounting ledger that allows the entire world to see every transaction. Each of these transactions is authenticated by miners (people who operate computers on a peer to peer network) to prevent fraud and also ensure no double spending. In exchange for their blockchain integrity maintenance services, miners receive a fee for each transaction they verify. Because there are countless miners trying to make money everyone is checking on each other working for mistakes. This proof of the working process is the reason the blockchain has not been hacked. In fact, this trust is what gives Bitcoin value.
Next we look at the best friend of trust, security.
What if my bank is robbed or there is fraudulent activity on my credit card? My bank deposits are covered by FDIC insurance. It is likely that my bank will also refuse any payments to my card that I have not already made. That doesn’t mean criminals will no longer be able to perform stunts that are least frustrating and time consuming. It is more or less peace of mind that comes from knowing that I am likely to recover from any wrongdoing against me.
In crypto, there are many options for where to put your money. It is necessary to know if the transactions are insured for your protection. There are well-known exchanges like Binance and Coinbase that have a proven track record of correcting errors for their clients. Just as there are lesser -known banks around the world, the same is true of crypto.
What happens if I throw the twenty dollar bill into the fire? This is also true for crypto. If I lose my credentials to sign in to a digital wallet or exchange then I will not be able to access the coins. Once again, I can’t stress enough the importance of running the business of a reputable company.
The next issue is scaling. Right now, this is probably the biggest barrier preventing people from making multiple blockchain transactions. When it comes to the speed of transactions, fiat money will act much faster than crypto. Visa can handle about 40,000 transactions per second. Under normal circumstances, the blockchain can only handle about 10 per second. However, a new protocol has been implemented that will increase it to 60,000 transactions per second. Known as the Lightning Network, it could result in creating the crypto future of money.
The conversation is incomplete without talking about convenience. What do people usually like about their traditional approach to banking and spending? For those who like money, it’s 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 for convenience, security and rewards.
Did you know that there are outside companies that also provide all of this in the crypto space? Monaco now issues Visa logo-ed cards that automatically convert your digital currency to local currency for you.
If you’ve ever tried to wire money to someone you know the process can be tedious and expensive. Blockchain transactions allow a user to send crypto to anyone in just a few minutes, no matter where they live. It is also cheaper and safer than sending a bank wire.
There are other modern methods of transferring money available in both worlds. Consider, for example, applications such as Zelle, Venmo and Messenger Pay. These apps are used for millions of millennia every day. Did you know that they are also starting to include crypto?
The Square Cash app now includes Bitcoin and CEO Jack Dorsey said: “Bitcoin, for us, never stops buying and selling. We believe it is a transformational technology for our industry, and we want to learn the most. It’s easy. ”
He added, “Bitcoin offers an opportunity to get more people access to the financial system”.
While it’s clear that fiat spending still dominates the way most of us move money, the new crypto system is quickly gaining ground. The evidence is everywhere. Before 2017 it was hard to find mainstream media coverage. Today almost all major business news covers Bitcoin. From Forbes to Fidelity, they all weigh their opinions.
What is my opinion? Perhaps the biggest reason Bitcoin can succeed is that it is fair, inclusive and provides financial access to many people around the world. It is viewed by banks and large institutions as a threat to their lives. They stand at the loss of the end of the largest wealth transfer the world has ever seen.
Still undecided? Ask yourself this question: “Do people rely on governments and banks more or less with each passing day?”
Your answer to that question may be what determines the future of money.