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 food. Only instead of costing $ 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 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 important that people trust the currency they use. What gives the dollar value? Is it gold? No, the dollar has not been supported by gold since the 1970s. Then what does it give the dollar (or any other fiat currency) value? The currency of some countries is considered more stable than others. Ultimately, people’s trust is that the issuing government of this money stands firmly behind them and essentially guarantees their “value”.
How does trust work with bitcoins, since it is decentralized, which means 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 each transaction. Each of these transactions is checked by miners (people who work with computers on a “peer-to-peer” network) to prevent fraud as well as ensure there is no double cost. In exchange for their blockchain integrity services, miners receive a fee for each transaction they verify. As countless miners try to make money, everyone checks to see if bugs are working on each other. This is proof of the workflow, so the blockchain never broke. In essence, this trust also gives value to bitcoin.
Next let’s consider a close friend of trust, security.
How about if my bank is robbed or my credit card fraud? My bank deposits are covered by FDIC insurance. Chances are, my bank will also cancel any payments from my card that I never made. This does not mean that criminals will not be able to perform tricks that are at least frustrating and time consuming. More or less peace of mind comes from the fact that I know that most likely I will be healed from any wrongdoing against me.
In cryptography, there are many options when it comes to where to store 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 grievance correction experience for their clients. Just as worldwide less than reputable banks, the same is true in cryptography.
What if I throw a twenty dollar bill into the fire? The same goes for cryptography. If I lose my credentials for 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 on the blockchain. When it comes to transaction speed, fiat money moves much faster than crypto. Visa can handle about 40,000 transactions per second. Under normal circumstances, a blockchain can only process about 10 per second. However, a new protocol is being implemented that will increase to 60,000 transactions per second. Known as the Lightning Network, this could lead to the crypto future becoming the future of money.
The conversation would not be complete without talking about convenience. What do people usually like about traditional banking methods and spending? For those who prefer cash, most of the time using them is obviously easy. If you are trying to book a hotel room or rent a car, you need a credit card. Personally, I use my credit card wherever I am, for convenience, security and reward.
Did you know that there are companies out there that provide all of this in cryptospace as well? Monaco now issues cards with the Visa logo that automatically convert your digital currency to local.
If you’ve ever tried to connect money to someone you know, the process can be very tedious and expensive. Blockchain transactions allow a user to send an encrypted message to anyone in just a few minutes, no matter where he lives. 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, apps like Zelle, Venmo and Messenger Pay. These programs have been used every day for millions of millennia. Did you also know that they are also starting to include cryptography?
The Square Cash app now includes bitcoin. 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 is clear that financial costs still dominate 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 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 gives financial access to more people around the world. Banks and large institutions see this as a threat to their very existence. They are apparently losing the greatest transfer of wealth the world has ever seen.
Still undecided? Ask yourself, “Do people trust governments and banks more or less every day?”
The answer to this question may be what determines the future of money.