The history of money is a fascinating topic and one that can illuminate the future of money better than any crystal ball. We’ll begin with some brief background before turning to the subject of cryptocurrency. Our current monetary system is based on fiat currency, which means it has value because a government says it does. It’s backed by nothing but trust in the issuing government’s ability to maintain the value of its currency.
Cryptocurrency isn’t tied to a central bank or government like fiat currency. Instead, it uses cryptography to secure funds on its blockchain-based infrastructure. Cryptocurrency markets also have an upper supply limit so there will never be more than a certain amount created, unlike traditional currencies that can be printed at will by governments. Moreover, cryptocurrency prices are governed by supply and demand unlike a government determining the value.
Such is the extent of benefits provided by cryptocurrency that it has been deemed the future of money as we know it. Here are the top reasons why the cryptocurrency is the future of money.
Cryptocurrency is more secure and private than traditional banking. Your credit card transactions are not safe, even if you use a credit card for the only online purchase. Because your transaction data can be collected from the retailer and it’s illegal to collect this kind of information by hackers.
But with cryptocurrency, you can purchase without any risk because there is no personal information saved. Using cryptocurrency is like using cash for online transactions. All those things make Bitcoin safer than conventional currency.
The encryption used in cryptocurrency makes it impossible to counterfeit or double-spend by copying the same currency units multiple times. Instead, each Bitcoin has its unique fingerprint and is defined by a public address and a private key (a 256-bit number that only you know).
Cryptocurrency is the future of money because it can be accessed from anywhere in the world. People in developing countries, who may not have access to a traditional bank or credit union, can use cryptocurrency to make purchases and exchange money for goods. Cryptocurrency is advantageous for people in countries with unstable economies or volatile currencies because it provides an element of stability that isn’t always there when dealing with traditional banking systems.
One of the most obvious benefits of using cryptocurrency is that you can avoid the high fees charged by banks. Even if you have a checking account, every time you withdraw money from an ATM or make a purchase with your debit card, there’s typically a fee attached. Transferring money between bank accounts involves extra fees, too. And don’t even get us started on the fees associated with credit cards.
With cryptocurrency, transactions are much faster and more straightforward: there are no middlemen involved like banks and payment processors. With Bitcoin, for example, transfers take about 10 minutes to complete. This means that you don’t have to wait several business days for your transaction to clear, it happens almost instantaneously.
One of the reasons why Cryptocurrency is the future of money is that it is open source. Let’s take bitcoin, for example. Its source code was released in 2009 by Satoshi Nakamoto as open-source software. This means that anyone can check bitcoin’s code for bugs, and even make improvements to it. Bitcoin is based on an open network, which allows anyone to be a part of the discussion.
All the changes made are transparent, everybody has access to all the records at any given moment and anybody can audit the code. Open source also means that nobody owns or controls this network and everyone can take part. It makes transactions using cryptocurrencies transparent and democratic, therefore making it extremely difficult for corruption or censorship to occur within this system. In comparison, closed source software includes proprietary software licensed under the exclusive legal right of the copyright holder.
This generally means that only the person holding the copyright gets full control over it and can decide who else can use it (a great example of such software would be Microsoft Windows). With this kind of “closed” model, we don’t have full transparency over what we are using. It’s because we cannot see if there are any malicious codes hidden inside that might compromise our privacy or security whilst making online transactions/payments, etc.
Blockchain technology is a decentralized system that ensures trust without the need for a trusted third party to facilitate digital relationships. The ledger, which stores all transactions and data, is distributed across many nodes. This means that any attempt to hack the database would require an abnormally large amount of computing power to override it, making it nearly impossible.
It also allows users to verify their data without having to pay anyone else to do so. This verification process occurs through cryptography, which uses complex algorithms and keys to create “digital signatures” or hashes of information. It’s then passed between two parties looking to verify each other’s work on a project (without revealing their information).
Unlike fiat currencies, cryptocurrencies cannot be printed as they are created digitally. This means that there is no upper limit. The amount of bitcoin in the world is limited to 21 million. However, this divisibility goes beyond just being able to break down each coin into smaller parts. Cryptocurrencies can be broken down into even smaller pieces than fiat currencies can.
While dollars can be broken down into cents (1/100) and euros into centimes (1/100), cryptocurrency offers far greater precision for transactions made online. It’s possible to spend small amounts of money for small tasks like 10 satoshis for clicking on an ad or 100 satoshis for visiting a website for 30 seconds. It’s something that would be impossible with fiat currency due to transaction fees as well as the inability to divide fiat currency beyond 2 decimal places (cents).
As cryptocurrency is a digital asset, so it can be used anywhere in the world. All you need to have is an internet connection and a cryptocurrency wallet. You may want to use your digital coins on your next trip overseas or when you are shopping from an international e-commerce website.
Crypto will help you to use your money globally with no friction and limits. If a person has got cryptocurrency, he/she can easily transfer it to anyone around the globe within seconds through blockchain technology. The transaction fees for cryptocurrency transfers are also very low as compared to traditional banks.
In conclusion, it’s more than obvious from the recent and rapid rise in cryptocurrency popularity that it is the future of money. Holding your own money without a credit card company or bank involved means you are in control at all times. And this right is something everyone will be able to have due to cryptocurrency. No doubt, this new financial system will be a huge improvement over what we have now.