Cryptocurrencies are on the rise and some are already questioning whether it is an alternative to fiat money
Physical money is losing steam. More and more people pay with a credit card or those who use applications like Bizum to make transfers. All this while concepts such as cryptocurrencies begin to resonate more and more strongly, even at street level. With great doubts, of course. Is this digital currency really an alternative to the euro, dollar or pound?
Bitcoin is the best known cryptocurrency on the market, although there are thousands of different ones. Perhaps because of the fame that great names in new technologies have given it such as Elon Musk, the owner of Tesla and one of the richest men in the world, although it is also the asset that has increased in value the most in recent years and that It has turned several of the pioneers into millionaires in just a few years. At the moment, a single Bitcoin is equivalent to more than 50,000 euros when in 2011 it was equivalent to a single dollar.
However, this digital currency does not appear to be the substitute for the euro, pound or dollar in the short term. For the price that it reaches at the moment, the investment in Bitcoin would be more linked to the purchase of the State Treasury or gold. In other words, it would be more than one store of value. But that doesn’t make it unusable.
“In the not too distant future people will be able to pay in Bitcoins. In fact, there are already stores that accept this currency as an exchange currency ”. On the other hand, this expert points out that “if the euro stops being used and cryptocurrencies are used, it will probably be other currencies other than Bitcoin.”
“There are many types of digital currencies. The fact that the word contains ‘coins’ may lead to think that they are a payment tool, but ‘cryptos’ have many functions. Some can serve as reserves of value, others could be similar to what are stock exchanges and others similar to traditional currencies ”. For in depth information you can visit encryptobiography.
And it is that cryptocurrencies could become an alternative to fiat money and there are some that have been created with that same intention. “For example Cardano – a third generation cryptocurrency – is priced very close to the euro. It fluctuates between 80 cents and 1.20 euros and could be a candidate to supplant money as we know it today. In fact, on October 29, 2021, two luxury villas located on the islands of Madeira (Portugal) were bought by a user through Cardano for a value of 4.1 million euros. The prelude to what may be the not too distant future.
However, there is still a long way to go for this type of currency to become a real alternative on a day-to-day basis. There are almost more questions than answers generated by its possible circulation for daily operations. These unknowns, together with the billion-dollar fortunes that a few have been able to amass thanks to the rise of these coins, have led many people to become interested in this topic. Although all that glitters is not gold.
One of the main problems that surround cryptocurrencies is the misinformation that exists about a novel and revolutionary concept.
However, the strong point of cryptocurrencies is security. All thanks to blockchain technology. It is a shared, decentralized and secure database. Shared and decentralized because there are copies of that database on millions of computers around the world. Safe, because those copies are cryptographically protected: they cannot be attacked, banned or deleted. And if there is a discrepancy in the records, a consensus mechanism acts as a central authority and allows detecting which one is correct.