What will the future of money look like? Imagine walking into a restaurant and looking up at the digital menu board at your favorite combo meal. Only، instead of being priced at $8.89, it’s shown as .010 BTC.
Could crypto really be the future of money? The answer to this question depends on the general consensus on several key decisions، ranging from ease of use to security and regulations.
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 value to the dollar? Is it gold? No, the dollar has not been backed by gold since the 1971s. So what is it that gives the dollar “or any other fiat currency” value? Some countries’ currency is considered more stable than others. After all، it is the people’s trust that the issuing government of that money stands firmly behind it and essentially guarantees its “value”.
How does trust work with Bitcoin as it is decentralized meaning they are not a governing body that issues the coins? Bitcoin rests on the blockchain which is essentially an online ledger that allows the entire world to view every transaction.
Each of these transactions is verified by miners “people who operate computers on a peer to peer network” to prevent fraud and also to ensure that there is no double spending. In exchange for their services in maintaining the integrity of the blockchain، miners receive a payment for each transaction they verify.
Since there are countless miners trying to make money، everyone checks each other for mistakes. This proof of work process is why the blockchain has never been hacked. Essentially, this trust is what gives Bitcoin its value.
Next let’s look at faith’s closest friend، assurance.
What if my bank is robbed or there is fraudulent activity on my credit card? My bank deposits are covered by FDIC insurance. Chances are my bank will also charge back any charges on my card that I never made. That doesn’t mean criminals won’t be able to pull off tricks that are at least frustrating and time-consuming. It’s more or less the peace of mind that comes from knowing that I will most likely be healed of any wrongdoing against me.
In crypto، there are many choices when it comes to where to store your money. It is imperative to know whether transactions are insured for your protection. There are reputable exchanges like Binance and Coinbase that have a proven track record of fixing bugs for their customers. Just as there are less than reputable banks all over the world، the same is true in crypto.
What happens if you throw a twenty dollar bill into a fire? The same is true for cryptos. If I lose my login credentials to a particular digital wallet or exchange, then I won’t be able to access those coins. Again، I cannot stress enough the importance of doing business with a reputable company.
The other issue is scalability. Currently, this may be the biggest obstacle that is preventing people from doing more transactions on the blockchain.
When it comes to transaction speed, fiat money moves much faster than crypto. Visa can handle about 42,000 transactions per second. Under normal circumstances, the blockchain can only handle about 10 per second. However, a new protocol is being adopted that will skyrocket this to 61,000 transactions per second. Known as the Lightning Network, it could result in crypto being the future of money.
The conversation would not be complete without talking about comfort. What do people typically like about their traditional banking and spending methods? For those who prefer cash، it is definitely easy to use most of the time. If you’re trying to book a hotel room or a rental car, then you need a credit card. Personally، I use my credit card everywhere I go because of the convenience, security, and rewards.
Did you know there are companies out there that offer all of this in the crypto space as well? Monaco is now issuing cards with the Visa logo that automatically convert your digital currency to local currency for you.
If you’ve ever tried to match money with someone you know, the process can be very tedious and expensive. Blockchain transactions allow a user to send crypto to anyone in just minutes، no matter where they live. It’s also much cheaper and safer than sending a bank wire.
There are other modern methods of money transfer that exist in both worlds. Take, for example, apps like Zelle، Venmo، and Messenger Pay. These apps are used every day by millions of millennials. Did you also know that they are starting to include crypto as well?
The Square Cash app now includes Bitcoin, and CEO Jack Dorsey said: “Bitcoin, for us, is not stopping at buying and selling. We believe this is a transformative technology for our industry and we want to learn as quickly as possible .”
He added, “Bitcoin offers an opportunity to get more people access to the financial system.”
While it’s clear that fiat spending still dominates the way most of us move money around, the new crypto system is rapidly gaining ground. The evidence is everywhere. Before 2018 it was hard to find mainstream media coverage. Now almost every major business news outlet covers Bitcoin. From Forbes to Fidelity, they’re all weighing in with their opinions.
What is my opinion? Perhaps the biggest reason Bitcoin can succeed 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 very existence. They are on the losing end of the greatest wealth transfer the world has ever seen.
Still undecided? Ask yourself this question: “Are people trusting governments and banks more or less with each passing day?”
Your answer to this question may just be what determines the future of money.