Are Cryptocurrencies The New Cash?

by Andrew McGuinness     Jul 16, 2019

When knowledge of cryptocurrencies became mainstream, Bitcoin easily became the leader of them all. Out of the hundreds of altcoins on the market, Bitcoin was still rising and gaining power with incredible speed. In a couple of months, though, altcoins like Ripple, Ethereum, Litecoin, to name a few, became more popular, gaining tremendous value as more traders took notice of these digital currencies.

While Bitcoin is still the leading coin, with its value up to tens and thousands of dollars, trading experts can’t help but wonder if Bitcoin holds any real-world value at all. Similarly, other coins are inspiring the same question to both skeptics and passionate traders: do cryptocurrencies actually have real-world use?

A lot of people are predicting that crypto coins would eventually replace the cash system we have today. If so, what are the things we could expect from this turnover?

Why Cryptocurrency Could Be Good For Us

When passionate traders are asked why they like cryptocurrencies, their answers go beyond its exponential market growth and lead to this system’s most unique feature: decentralization. To most people, cryptocurrencies are an attractive alternative to cash precisely because transactions no longer necessitate third-party institutions like banks and foreign exchange centers.

In a world run by crypto, people will be sending money to different parts of the world in an instant, without having to go through application and paperwork. Think of the last time you went to a bank. How many hours did you spend lining up, hoping to send or receive money? With cryptocurrencies, experts are selling the fact that day-to-day interactions currently necessary when sending money will become obsolete. As a result, the system will be faster and more efficient for everyone.

Aside from pure convenience, decentralization allows crypto coins the freedom that fiat currencies don’t have. Because it isn’t regulated by country nor is it tied to the laws of supply and demand, the movement of cryptocurrencies are easier to predict.

Some financial experts even go as far as saying that cryptocurrencies might be the world’s solution to the problem of universal basic income.

No doubt, this new system calls for a seamless, simple, and unlimited range of transactions that could be better for an ever-modernizing society.

Why Cryptocurrency Could Be Bad For Us

If cryptocurrencies do successfully replace cash, there are a number of serious changes modern society has to come to terms with, especially in the economic and financial sector. Specifically, intermediary groups like commercial and national banks will no longer be deemed necessary, and will no doubt be forced to find new ways to adopt a digital financial system.

Similarly, those holding physical currencies as assets would suffer irrecoverable losses. Trillions’ worth of cash would suddenly be rendered useless. Cash would be considered outdated and new systems of payment would have to be distributed throughout the world.

Perhaps the biggest catfish to a crypto-run world is the lack of control governments have over their economy. Trading 101 tells us that governments are key figures in regulating their national currencies, and with digital coins running the world, it becomes harder for governments to gauge supply and demand. In turn, this responsibility will be handed over to independent crypto miners.

Assessing The Future

The game of cryptocurrencies is incredibly volatile where speculation is but a game of luck. As with anything relating to cryptocurrencies, speculating the benefits and pitfalls society can game from this digital financial system is hard to estimate.

In the meantime, what you can do as an investor is make sure that your profits keep going up as you diversify your portfolio. Happy trading!

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