Hey, you need not feel bad because you are hearing cryptocurrency for the first time; you are not alone. Before thinking about cryptocurrency becoming the future of money or why it’s regarded as the future of money, the first question is “what cryptography?” is and “what’s cryptocurrency?” Cryptography is simply the coding of information only the recipient, and the sender could process. Cryptocurrencies, on the other hand, are synonymous with other currencies (fiat). Still, in this case, it uses digital technology (blockchain) to process its transactions easily and transparently. For once, you’d understand what technology is the best thing that has happened to any economy. As the world progresses, so does technology, and it has now come for our financial sector.
Before now, money is more centralized, with a selected few in the power of how money circulates as well as the governance. With cryptocurrency, the power to determine how much money on circulation or how money should be spent became transferrable. Hence, every individual is now given the opportunity to decide how to spend and when to spend their money. With decentralization, governing of money moved from the central body to the hands of the masses.
There are several reasons why cryptocurrency has been regarded as the future of money, and these reasons are intertwined with the history and evolution of technology. Advancements have been one of the significant characteristics of technology, meaning that any sector where technology has been adopted will at some point undergo advancements such that several traditional ways of doing things become facilitated with technology. Cryptocurrency in the financial sector is the technology that’s seeing to the progressive future of money. Before now, money has taken two major forms, and that’s coin and paper notes. Paper notes (fiat) remain the most used form of money. However, the future of money seems to favor cryptocurrency because of its advancements and advantages over traditional fiat.
Is cryptocurrency digital money?
Digital money is any form of currency or asset that can be stored, managed or exchange on a digital system. Cryptocurrency, on the other hand, is a digital asset, you cannot see it nor touch it like the paper fiat, but the value is quantifiable. Some of the popular cryptocurrencies are Bitcoin, ethereum, ripple, cardano, litecoin and others. For example, you can buy ethereum, being a digital currency, store and exchange it for fiat on exchange platforms.
Cryptocurrencies work pretty much the same way online banking and money transfer works. We are much familiar with sending and receiving money from all around the globe; nonetheless, these transactions might take time and incur hefty charges; with cryptocurrency, transactions are not only fast, but they also come with pocket-friendly charges.
Is cryptocurrency the end of fiat money?
This is by far one of the frequently asked questions about cryptocurrency and fiat. Indeed, cryptocurrency looks forward to becoming the future of money. Nonetheless, as of currently, fiat remains the most widely adopted medium of exchange. The reason is that not so many individuals know about cryptocurrencies. Some individuals haven’t heard about cryptocurrency, and the question is, do they have money? Of course, they do, and it’s going to take more than talking to explaining to them what cryptocurrency (digital money that cannot be seen nor touch) is, and why it’s better than fiat.
Currently, crypto isn’t the end of fiat money, as not many governments have adopted cryptocurrency transactions. However, some have adopted, and others are planning on regulating its activities. However, the propagation of cryptocurrency is growing daily, and several individuals are beginning to understand the perks or the reason why adopting crypto is probably the best option at securing the future, with the next evolution of money being cryptocurrency.
There are several advantages of adopting crypto as the future of money. While money has some properties such as a means of exchange and as a store of value. The characteristics of money include being fungible, durable and portable. On the other hand, cryptocurrency has this characteristic; hence, it’s the perfect fit for the future of money. When discussing the future of money, the need for the reason why cryptocurrency fits in better than fiat include the following
- Cryptocurrency is digital money, and it’s online, meaning it can be accessed anywhere and anytime
- Cryptocurrency can increase and decrease with respect to market conditions and price volatility
- Cryptocurrency related transactions are fast and incur pocket-friendly charges
- Cryptocurrency is decentralized and does not require a central body for governance
- It’s also very transparent, with an open-source ledger to store each of its transactions.
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