Cryptocurrency users continue to increase as crypto applications also expand across industries and communities. Today, some businesses are already allowing their customers to use altcoins when paying for their purchases. Some crypto-friendly brand names include no less than Google, IBM, Ubisoft, and Starbucks—and you can only expect this list to grow longer.
Cryptocurrencies aren’t just for buying goods and services, though. They can be used to invest in a company, pay employees’ salaries, exchange tokens for fiat money, and even as a credit tool that enables investors to earn an interest rate. This brings us to the idea of crypto replacing money in the future. It’s a possibility that stands to benefit the cryptocurrency industry and its users.
Here are some of those advantages.
- Safety and security. Unlike fiat currencies, cryptocurrencies are nearly impossible to manipulate because the blockchain technology that these virtual tokens or coins use is protected by encryption. Hackers or scammers will need to bypass an entire blockchain—which is equal to several layers of security protocols—to be able to carry out an illegal transaction.
- Lower transaction fees. Most countries have a central bank that’s in charge of regulating local and international currencies that flow through the economy. On the contrary, cryptocurrencies are decentralized or unregulated. This means you won’t be paying transaction fees to third-party intermediaries, which will lower transaction costs for both consumers and businesses.
- Cashless interaction. The ongoing COVID-19 pandemic has emphasized the need for global economies to establish a cashless ecosystem, which will help allow organizations and individuals to continue trading without using traditional banknotes. One can never be too careful when it comes to avoiding exposure to the coronavirus, and cash or coins can be one way of transmitting the virus. Cryptocurrencies eliminate this risk since transactions are done digitally instead of face-to-face.
Potential Issues in Using Cryptocurrencies as Cash
Although cryptocurrencies have the potential to replace money in the future, just how soon that happens is a major concern for those who welcome the idea.
For one, some people are still more comfortable carrying cash instead of using digital money. In fact, for every nation around the world, it’s not unusual to come across people who don’t maintain even a single bank account.
Moreover, using cryptocurrencies as the primary payment method requires a significant change in the IT system or infrastructure. Companies will need to study how they should use the blockchain technology to process crypto transactions and then train web or app developers to make the transition.
With these challenges, all stakeholders may need to take certain steps that will pave the way for a future world using cryptocurrency:
- Governments and their central banks need to create their own cryptocurrency. Without establishing their own iteration of virtual money, major cryptocurrencies like Bitcoin will remain as the most commonly used money for trading.
Plus, since central banks and their member banks already have financial management systems in place, they could look into the possibility of using the same system, but this time, adding crypto into the mix. For example, bank ATMs may start dispensing crypto, like how Bitcoin has its own ATMs.
- Private individuals should consider learning how to trade on cryptocurrency exchanges or platforms. Crypto traders attest that they’re able to make good profits and that they’re getting a lot of support from the crypto community by regularly sharing Bitcoin news updates. With those updates, they’re able to make an informed decision about their trading plans and strategies.
Cryptocurrency as the Future World Money
Governments, corporate entities, and private citizens will all need to work together to push the token economy to greater heights—that is, for cryptocurrencies to be used all around the world for shopping, trading, and investing course, as soon as possible. Ultimately, cryptocurrencies might be an alternative to the failing current monetary system that gives the elite (politicians, central banks, and large companies) full control over the supply of money and economic decisions.