Cryptocurrency: The future of transactions
Did you know that the first financial transaction using Bitcoin was done by Laszlo Hanyecz who paid 10,000 BTC to buy two Domino’s pizzas?
A couple of decades ago, life without landline phones was unimaginable. But, this outdated trend hasn’t affected the millennial generation at all. We can do just fine without those wired bulks— thanks to mobile phones. In a similar manner, the future of the finance system could also change drastically. Imagine a day when you do not hold a bank account, instead your salary is credited to your cryptocurrency wallet directly. That’s the future blockchain promises.
Next year will be the tenth anniversary of the first decentralized cryptocurrency, Bitcoin. Being the first of its kind, Bitcoin triggered a revolution in the finance and IT industries. While its architecture was praised and studied by technology professionals, the currency itself became an investment and trading platform for many others.
Using similar architectures, several companies and individuals came up with their own cryptocurrencies which became trading fuel for several people around the world. These currencies include Ether, Ripple, Litecoin and hundreds of others. It is quite poetic that the number of cryptocurrencies in the market right now outnumbers the actual number of national paper currencies.
So, is this the death of traditional cash?
According to several visionaries and futurists, cryptocurrency is here to stay— volatile values and all. This group of people includes author Thomas Frey who predicts that cryptocurrencies will displace more than a quarter of national currencies by the year 2030. The main reason for this, according to him, is that cryptocurrencies are more efficient than traditional finance techniques.
But, what makes cryptocurrency better than traditional national hard cash?
Cryptocurrency is Technology
Traditional currency can be considered a hard document. Even when you are performing internet-based transactions, there will be certain paperwork involved. Moreover, there are several disadvantages of traditional national currencies. For instance, transferring cash, even if it is online, internationally can assert high charges and taxes. It also requires special permissions or certain privileges to be given to your bank account by the authorities. Furthermore, because of the design of the system, the traditional finance system does not operate 24×7. Banks close at 5 PM, Wall Street closes at 4 PM and these two governing entities also do not operate on weekends or public holidays.
As cryptocurrency is a digital asset, it is not limited by these issues. The system operates on a decentralized network which is global. Because of this, there will be minimal to no fee for any kind of transaction, no matter the origin and destination of the currency. Add on the fact that the system is always online, it becomes quite evident why cryptocurrency is far superior to traditional national currency.
Cryptocurrency will Redefine Commerce
Several professionals working in the finance domain have seen a revolution coming for a long time. Because of its design, cryptocurrency is more attractive to investors and traders as it operates on a peer-to-peer network. This removes any involvement of a third-party, like a bank, financial advisor or broker. This also rids users of any transaction fee required for the transfers and trades to happen.
Traditional Systems Require Transaction Fee
Also, the fact that it uses cryptography to secure all the data and gives users complete anonymity is a cherry on top of the cake. Additionally, the systems are designed and operate on automated algorithms which means that there will be no room for human error and no delays in transaction times.
One more important factor is that traditional internet banking approaches are vulnerable to security breaches and hacking. As blockchain-based cryptocurrencies operate using secure 256-bit hashes, it is theoretically impossible to hack any system.
Cryptocurrency is Uniquely Suited for Millennials
It is a proven fact that the psychology and way of thinking of millennials are drastically different than other generations. This is because we, as a people, have grown with technology and accepting all its evolutions with open arms. Because of this, millennials are more open and accepting to change. Our acceptance of newer technologies is even truer when it comes to the blockchain. Studies suggest that most of the action happening in this domain is fueled by people aged between 22 and 40.
Adding to this the fact that our generation loves to innovate and challenge traditional systems, it is quite evident that cryptocurrency will become a norm in a few years because of the huge number of advantages it brings to the table.
Now that you know few of the reasons why cryptocurrency is going to be the future of the finance and commerce markets, let’s look at a few scenarios we can expect:
- Retail stores might set a preference to a particular cryptocurrency (Bitcoin, Ether, Ripple or any other) above all others depending on the security and soundness to be utilized for transactions.
- Companies like Amazon, Walmart, Starbucks, eBay etc might come up with their own proprietary cryptocurrencies for transactions.
- Governments could issue their own ledger systems and cryptocurrencies that will be treated as national currency.
There is no doubt cryptocurrency and blockchain are the future of the finance and IT industries, respectively. These two interrelated systems are changing several of our traditional approaches and discarding most of their disadvantages as they go.
If you are someone who wishes to be relevant in the industry in half a decade’s time, you need to be skilled in the crypto and blockchain domains.
Becoming an expert in blockchain may seem like a difficult task, but in all honesty, if you are good with OOPs and Web Development, it will be a piece of cake. If you aren’t already, why not become a master in full stack development, and start your journey down the blockchain career path?