What will the future of money look like? Imagine walking into a restaurant and looking at the digital menu board in your favorite combo meal. Only, instead it costs $ 8.99, it is shown as 00.00 BTC.
Can Crypto Really Be the Future of Money? The answer to that question rests on the overall consensus on a number of important decisions ranging from safety and ease of use to rules.
Let’s examine 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 essential that people rely on the currency they are using. What does the dollar give its value? Is this gold? No, the dollar has not supported gold since the 1970s. Then what is it that values the dollar (or any other fiat currency)? The currency of some countries is considered more stable than others. Ultimately, it is the people’s trust that the government issuing that money stands firmly behind it and essentially guarantees its “value”.
How does trust work with bitcoin because it is decentralized which means a governing body that does not issue coins? Bitcoin sits on the blockchain which is basically an online accounting account that allows the whole world to view every transaction. Each of these transactions is verified by miners (people operating computers on a peer-to-peer network) to avoid fraud and also to ensure that there is no double spending. In return for their services to maintain the integrity of the blockchain, miners get paid for every transaction they verify. Since there are countless miners trying to make money, each check serves each other for errors. The work process is proof of why the blockchain was never hacked. Essentially, it is trust that gives bitcoin value.
Next we look at the trust’s closest friend, security.
How to do if my bank is robbed or there is fraudulent activity on my credit card? My deposits with the bank are covered by FDIC insurance. Chances are my bank will reverse any charges on my card that I never did. This does not mean that criminals will not be able to pull off much less frustrating and time-consuming stunts. It is more or less the peace of mind that comes from knowing that I am most probably made of any wrongdoing against me.
In crypto, there are a lot of options when it comes to storing your money. It is essential to know if the transaction is insured for your protection. There are reputed exchanges such as Binance and Coinbase which have a proven track record of correcting mistakes for their customers. Just as there are fewer than reputed banks worldwide, the same is true in crypto.
What if I throw a twenty dollar bill in the fire? The same is true for crypto. If I lose my signature in a certain digital wallet or exchange I will not be able to access those coins. Again, I cannot stress enough the importance of conducting business with a respected company.
The next digit is of scaling. Currently, this may be the biggest obstacle preventing people from doing more transactions on the blockchain. When it comes to transaction speed, fiat money runs much faster than crypto. Visa can handle around 40,000 transactions per second. Under normal circumstances, the blockchain can only handle around 10 per second. However, a new protocol is being created that will skyrocket it to 60,000 transactions per second. Known as the Lightning Network, this crypto can result in making future money.
The conversation would not be complete without talking about convenience. What do people usually like about their traditional banking and spending methods? For those who prefer cash, it is obviously easier to use most of the time. If you are trying to book a hotel room or rental car, you need a credit card. Personally, I use my credit card everywhere because of convenience, security and rewards.
Do you know that there are companies providing all this in the crypto space too? Monaco is now issuing a Visa logo-add card that automatically converts your digital currency to the local currency for you.
If you have ever tried to send money to someone, then you know that the process can be very tedious and expensive. Blockchain transactions allow the user to send cryptocurrencies to anyone in a matter of minutes, wherever they live. It is much cheaper and safer than sending bank wire.
There are other modern methods for transferring money that exist in both worlds. For example, take applications like Zelle, Venmo and Messenger Pay. Millions of millennials use these apps daily. Do you also know that they are starting to incorporate crypto as well?
The Square Cash app now includes Bitcoin and CEO Jack Dorsey: “Bitcoin, for us, is not a stop on buying and selling. We believe this is a transformational technology for our industry, and we want to learn as soon as possible . ”
He said, “Bitcoin offers more people the opportunity to access the financial system”.
While it is clear that fiat spending still dominates the way most of us carry money, the runaway crypto system is rapidly advancing. Proof is everywhere. Prior to 2017 it was difficult to find mainstream media coverage. Now almost every major commercial news outlet includes bitcoin. From Forbes to Fidelity, they are all weighing in with their opinions.
What is my opinion? Perhaps the biggest reason that Bitcoin is successful may be that it is fair, inclusive and financial access to more people worldwide. Banks and large institutions consider it a threat to their existence. They stand to lose at the end of the world’s greatest wealth.
Still undecided? Ask yourself this question: “Are people relying more and more on governments and banks with each passing day?”
Your answer to that question can only be what determines the future of money.