What will the future of money look like? Imagine you walk into a restaurant and look at a digital menu board for your favorite combination meal. Only instead of its price being $ 8.99, it is listed as 009 BTC.
Can a crypt 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 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 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. Then what gives the dollar (or any other currency) value? The currency of some countries is considered more stable than others. After all, people believe that the government that issued the money stands firmly behind them and, in effect, guarantees their “value”.
How does trust work with bitcoins because it is decentralized, meaning they are not the governing body that issues coins? Bitcoin is on the blockchain, which is basically an online ledger that allows the world to view every transaction. Each of these transactions is checked by miners (people who work on computers in a peer-to-peer network) 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 verified transaction. Since there are countless miners trying to make money, each one checks each other’s work for bugs. This proof of workflow is the reason that the blockchain has never been hacked. In essence, trust is what gives Bitcoin value.
Next let’s look at a close friend of trust, security.
What if my bank is robbed or my credit card is fraudulent? My bank deposits are covered by FDIC insurance. Chances are, my bank will also cancel any fees from my card that I never did. This is not to say that criminals will not be able to perform tricks that are at least frustrating and time consuming. It is more or less peace of mind that comes from knowing that I will most likely be cured of any wrongdoing against me.
The crypto has many options when it comes to where to store your money. Be sure to know if the transaction is insured for your protection. There are reputable exchanges such as Binance and Coinbase that have a proven bug fix experience for their clients. Just as there are fewer reputable banks around the world, so is the crypto.
What will happen if I throw a twenty-dollar bill into the fire? The same is true for the crypt. If I lose my credentials to log in to a specific digital wallet or exchange, I will not be able to access these coins. Again, I can’t stress the importance of doing business with a reputable company.
The next issue is scaling. Currently, this may be the biggest hurdle preventing people from conducting more transactions in the blockchain. As for the speed of transactions, fiat money moves much faster than crypto. Visa can handle about 40,000 transactions per second. Under normal conditions, the blockchain can only process about 10 per second. However, a new protocol is currently being adopted that will rapidly increase this to 60,000 transactions per second. Known as the Lightning Network, this could lead to the crypto becoming future money.
The conversation would not be complete without talking about convenience. What do people usually like about their traditional banking methods and cost methods? For those who prefer cash, it’s obviously easy to use most of the time. If you are trying to book a hotel room or rent a car, you will need a credit card. Personally, I use my credit card wherever I go because it’s convenience, security and rewards.
Did you know that there are companies that provide all this in the crypto space? 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 transfer money to someone, then you know that this process can be very tedious and expensive. Blockchain transactions allow the user to send crypto to whom in 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, applications such as Zelle, Venmo and Messenger Pay. These programs are used daily by millions of millennials. 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 doesn’t stop at buying and selling. We believe it’s a transformational technology for our industry and we want to learn as soon as possible.”
He added: “Bitcoin gives 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 cryptosystem is rapidly gaining ground. Evidence is everywhere. Until 2017, it was difficult to find coverage in the mainstream media. Now almost every major business news agency covers bitcoin. From Forbes to Fidelity, they all weigh their opinions.
What is my opinion? Perhaps the biggest reason for the success of bitcoin 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 found themselves at the losing end of the greatest transfer of wealth the world has ever seen.
Haven’t decided yet? Ask yourself, “Do people trust governments and banks more or less every day?”
Your answer to this question may be what determines the future of money.