Cash VS Crypto, where does the future of currency lie?

Crypto is everywhere. The world is talking about bitcoin, with 221 million crypto users worldwide there is a definite shift in adoption.

Despite this, there is still a divide in opinion, on one side you have the believers preaching about how crypto will replace traditional money and the revolution is coming. On the other hand you have the more traditional view that crypto is a fad that, ultimately, is bad for the planet, it’ll blow over and their normality can resume as it always has.

Bitcoin, and crypto as a whole, is clearly booming at the moment. More and more incredible fintechs are supporting it’s acceptance, and an increasing number of people are becoming accustomed to it and investing, but what exactly is crypto and the blockchain and why should you care?

What is it and where did it come from?

In October of 2008, and in the wake of the global financial crisis, a white paper was released by an individual (or team of people) under the pseudonym Satoshi Nakamoto. This paper described a revolutionary peer-to-peer electronic cash system, which came to be formally known as Bitcoin. 

Running on the blockchain, a chain of data stored in chronological order, its key aim was primarily to be able to send money over the internet and become a viable alternative currency free from the constraints of a central government or bank, giving people the freedom to control their own money.

Benefits

Bitcoin and cryptocurrencies have a wealth of benefits which make them an attractive alternative for many. For example the fact that there are few middle men means that transaction fees are low and payments can be almost instantaneous no matter where you are in the world.

Cryptocurrencies are also hugely accessible. Because crypto is free from central governance and banks, they can be a viable asset, and payment method, to those who have money and funds but are without, or unable to get, a mainstream bank account.

Being free from banks also means crypto has high levels of confidentiality. Unless a user freely publishes their transactions they are never directly associated with their personal identities. They aren’t 100% anonymous due to “know your customer” (KYC) and “anti money laundering” (AML) regulations, but are much harder to trace than traditional card payments.

Negatives

Despite these benefits crypto is still in its infancy and therefore has some creases which need ironing out. One such crease is its high volatility which comes from it being free from a central government. This therefore means that there is no central control over the pricing of the coin, it is dictated by the investors and owners, making it susceptible to large price swings as a result.

Another side effect of this infancy is generally low levels of acceptance. Despite many of the biggest companies in the world taking Bitcoin as payment, it is still not a widely accepted currency. This may be due to a low level of trust due to the lack of customer and merchant protection for completed transactions, once the payment is sent the process is irreversible, and if the money is sent to the wrong wallet then it is impossible to retrieve.

As a result of this there is also an issue with coins being “orphaned”. Once a wallet or password is lost, so is the currency being stored. A lot of physical, and digital, wallets have been lost in the past, or destroyed with an old hard-drive and they are now impossible to retrieve as a result. Entire fortunes can be lost within a few seconds with the coins being orphaned and lost forever.

Closing thoughts

At Flytiful we’re huge advocates for the use of crypto and despite it’s current volatility we believe that it is going to overtake traditional currencies in the near future. The cost benefits are clear and the technology is ever evolving which will increase acceptance around the world and we feel it is only a matter of time until it is the norm.

Similarly working with brands such as Zumo, Wirex and eToro we’re seen the amazing work that crypto can do, and the power it holds. With all this in mind we’re certain that it is the future of payments and in time everyone will use crypto in their daily lives.