Are Cryptocurrencies the Future of Money?

It is no longer news that the world is heading to a completely cashless era. lt won't be uncommon to see people pay for items like sweets via mobile money App. However, the question is, 'are cryptocurrencies the future of money?' Or would fiat currencies still be the currencies dominating the soon-to-come cashless world?

More and more people are shifting to cryptocurrencies and this is because cryptocurrencies have proved to be the safest way to protect people's monetary wealth. This sense of safeness comes from the fact that many cryptocurrencies use blockchain, a decentralized system of managing transactions. So no central management policy or inflation can destabilize the value of cryptocurrencies.

Other factors that influence the strength of cryptocurrencies like Bitcoin are; trust, security, and convenience. Trust is the most important reason why fiat currencies have thrived so far. People trust paper money because their government trusts them and places value on them. This value is further backed up with governmental policies that protect the fiat currency from losing value.

In terms of cryptocurrencies like Bitcoin, there is a higher level of trust and security people attach to it. This is because Bitcoin is distributed through blockchain, an open accounting ledger. All users of Bitcoin can access the ledger and check each transaction to ensure that fraud is not being committed on the blockchain. This keeps the blockchain safe and builds a collective sense of responsibility in users as such users are usually compensated.

This is in contrast to the security traditional banks provide for their platforms. Although bank users' money is insured by banks, banks' systems are still vulnerable to hackers. Hackers can hack users' bank accounts via bank online portals.

Another area cryptocurrencies are outshining fiat currencies is in the area of convenience. With cryptocurrencies, you can send money to someone safely in another continent faster with little or no charges. You don't have to worry about restrictive bank policies, government policies, or limits on the amount of money you wish to move. 

While it’s clear that fiat currencies still dominate the money world, cryptocurrencies are gaining ground at an alarming speed. More countries are beginning to approve cryptocurrencies as legal currencies. 

This proves that in a few years from now, cryptocurrencies like Bitcoin would be recognized by all governments in the world as legal. It would however be problematic for traditional banks to stay afloat in such a wave of change and this would prove quite a headache for governments.

Perhaps, traditional banks may transform to online wallets and exchanges, building on their previous brick and mortar reputation. Account-holders in such banks may then be given options to convert their fiat currencies to cryptocurrencies as fiat currencies get fazed out. We never know but what we know is that fiat currencies' days are numbered and so are traditional banks'. We can only look to the promising future of a world with stable digital currencies that unite the world and protect people's wealth.