Hey, you don’t have to feel bad because you are hearing cryptocurrency for the first time; you’re not alone. Before thinking about what cryptocurrency becomes the future of money or why it is considered the future of money, the first question is “what crypto?” is and “what is cryptocurrency?” Cryptography is simply the encoding of information that only the recipient and the sender could process. Cryptocurrencies, on the other hand, are synonymous with other currencies (fiat). However, in this case, it uses digital technology (blockchain) to process its transactions in a simple and transparent way. For once you would understand which technology is the best thing that has happened to an economy. As the world progresses, so does technology, and it has now arrived for our financial industry.
So far, money has been more centralized, with a privileged few in power over how money flows as well as governance. With cryptocurrency, the power to determine how much money is in circulation or how money should be spent has become transferable. As a result, each individual now has the ability to decide how and when to spend their money. With decentralization, the governance of money has shifted from the central body to the hands of the masses.
There are several reasons why cryptocurrency has been seen as the future of money, and these reasons are closely tied to the history and evolution of technology. Advances have been one of the important characteristics of technology, which means that any sector where technology has been adopted will at some point undergo advancements such that several traditional ways of doing things will be facilitated by technology. Cryptocurrency in the financial industry is the technology that takes care of the progressive future of money. So far, money has taken two main forms, namely coins and paper notes. Paper banknotes (fiat) remain the most widely used form of currency. However, the future of money seems to favor cryptocurrency due to its advancements and advantages over traditional fiat.
Is cryptocurrency digital money?
Digital currency is any form of currency or asset that can be stored, managed, or traded on a digital system. Cryptocurrency, on the other hand, is a digital asset, you can’t see or touch it like fiat paper, 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 it and exchange it for fiat on exchange platforms.
Cryptocurrencies work much the same as online banking and money transfers. We are very familiar with sending and receiving money from all over the world; however, these transactions can be time consuming and incur high fees; With cryptocurrency, transactions are not only fast, they also come with affordable fees.
Is cryptocurrency the end of fiat money?
This is by far one of the frequently asked questions about cryptocurrency and fiat. Indeed, cryptocurrency is eager to become the future of money. Nevertheless, at present, fiat remains the most widely adopted medium of exchange. The reason is that not many people know about cryptocurrencies. Some people haven’t heard of cryptocurrency, and the question is, do they have any money? Of course, they do, and it will take more than talking to them to teach them what cryptocurrency is (digital money that can’t be seen or touched) and why it’s better than fiat.
Currently, crypto is not the end of fiat money, as few governments have embraced cryptocurrency transactions. However, some have adopted it and others are considering regulating its activities. However, the spread of cryptocurrency is increasing daily and many people are starting to understand the benefits or the reason why adopting crypto is probably the best option for securing the future with the next evolution of money being the cryptocurrency.
There are several advantages to adopting crypto as a future of money. While money has certain properties such as a medium of exchange and a store of value. The characteristics of silver are that it is fungible, durable and portable. On the other hand, cryptocurrency has this characteristic; hence, it is the ideal solution for the future of money. When discussing the future of money, the need for why cryptocurrency fits better than fiat money includes the following:
- Cryptocurrency is digital money, and it’s online, which means it’s accessible anywhere, anytime
- Cryptocurrency can rise and fall depending on market conditions and price volatility
- Cryptocurrency-related transactions are fast and come with affordable fees
- Cryptocurrency is decentralized and does not require a central governing body
- It’s also very transparent, with an open source ledger to store each of its transactions.
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