Cryptocurrency is the Future of The Economy

Cryptocurrency refers to an internet concentered exchange medium that employs cryptographic functions in conducting financial transactions—cryptocurrencies influence blockchain technology in gaining transparency, decentralization as well as immutability. The most fundamental feature in Cryptocurrency is the fact that it doesn’t fall under the control of any authority that is the decentralized nature of the blockchain renders the Cryptocurrencies theoretically immune to the ancient and existing ways of government interference and control. Cryptocurrencies can be directly sent between two parties through the use of public and private keys. The transfers can be carried out with small processing fees and allows the users to evade the high fees that are charged by outmoded financial institutions. In the present day, Cryptocurrencies are said to have become a worldwide phenomenon that is known by many people. Currently, you can hardly trace significant banks, big accounting firms, prominent software firms, or even governments that do not carry out research on Cryptocurrencies, publish papers relating to it or even start the blockchain project. Virtual currencies, for instance, Bitcoin is said to have captured the imaginations of some, striking fears amongst others while confusing the heck out of the rest of us. Despite the challenges facing the use of Cryptocurrencies, they still have a chance of competing with the outmoded currencies as the core methods of payment and are deemed to be the future of the economy. This essay will provide critical analysis of the expected impact of Cryptocurrency on the economy, features that are uniques from the traditional currencies, and the pitfalls that may come along with the cryptography technologies to make a conclusion on the relevance of Cryptocurrency as the future of the economy.

A research was conducted by Chui, among others, that examined how well the various cryptocurrency types may serve as a global model of payment for thus defining the future of the economy. The study found out the optimal design of different Cryptocurrencies and the mode through which the currencies may efficiently support bilateral and multilateral trade amongst nations. The article indicated that cryptocurrencies face multiple drawbacks that affect their ability to become reliable methods of payment in the future. Amongst the challenges that are rendering it challenging for cryptocurrencies to substitute the traditional currencies as modes of payment is the fact that they are susceptible to the problem of doubleedusson.comspending. According to the study, cryptocurrencies lead to approximately 1.4 percent social welfare loss in expenditure hence rendering it an unreliable mode of payment. Nonetheless, the study found out that cryptocurrencies are giving a benevolent rise in economic activities. There is already an entire industry built around cryptocurrencies whereby the industry is said to be held by institutions that are enthusiastic or determined to the supervision of all digital exchanges of coins that are taking place across the globe (Chiu et al., 2017). The rate at which the cryptocurrency industry is developing is earthedusson.comshattering. The assertion can be proved by the early adopters who turned rich in a span of hours, finding opportunities to rise financially. Bitcoin that is deemed to be the most prominent of the cryptocurrencies has already permitted many people and companies to develop as well as flourish while many of them depend on trading as their income source (D’Alfonso et al., 2016). Therefore, the economy is set to slowly shift towards the adaptation of these needs, and cryptocurrencies exhibit the substantial potential of satiating them.

Also, cryptocurrencies present great opportunities for poorly banked countries. Over a third of the global populace lacks access to the necessary banking services that help them out in cases of personal financial crises, for instance, loans as well as checking accounts. These people, who in most cases are financially underprivileged, typically resort to dangerous and doubtful lending undertakings. The interest rates in cryptocurrencies are generally fair that subsequently translate into more instability amongst the persons who request loans. This is where the idea of cryptocurrencies comes in with high volatility as well as the ease of use. Currently, there are many programs and apps that are facilitating the usage of cryptocurrencies hence bringing them closer to the audience. An additional benefit to the use of the cryptocurrencies is that they are totally decentralized such that trading can freely take place across the borders. Technological advancement and use will lead to a financial revolution that will make everyone more financially connected, enabled, and empowered (Claeys et al., 2018). The decentralized ledger technology has made it easy for persons to use cryptocurrencies as a mode of virtual payment hence creating an ample platform for peer to peer transactions to thrive in modern times.

Cryptocurrency transactions are associated with low costs. Due to the fact that blockchain and cryptocurrencies do not require the actual brick to be existent, the costs linked to their transactions are said to be minimal. There is no necessity for employee wages, rent, or even utility bills to be paid, whereby the savings automatically morph into low transactional charges (Claeys et al., 2018). This fosters an encouragement for many people to trust the unique financial tools and start making financial transactions, thus allowing for the global economy to be more closely intertwined. And in accordance with the broker that an individual chooses, he or he can trade with no minimum requirements on deposits as it is in the case of Crypto Rocket. According to Joshi et al., the endorsement of digital currency use by giant corporations is making a promising prospect in the economy. Multiple central banks in many countries, including the United States and China, are carrying out research on nature and many other aspects of cryptocurrencies with the intention of future use. The use of cryptocurrencies is also associated with increased transparency of transactions. Due to the fact that cryptocurrencies and blockchain transactions are digitized and automated, they are said to be tracked in distributed ledgers. The best thing is that they are not susceptible to manipulation by either corporations or people and that substantially reduces the risks of corruption and fraud. This implies that the underdeveloped countries exhibit higher chances of indulging themselves in financial transactions, hence boosting their economies and social prospects (Joshi et al., 2018). Additionally, citizens are in a position to keep track of where the country’s funds are oriented hence will have a say within their political arena.

The use of cryptocurrencies will grant more power to entrepreneurs. There is no other more prosperous time for carrying out business than the present in the view that cryptocurrency and blockchain technology can assist entrepreneurs in receiving payments in more currencies (Lee, 2019). Among the central themes for many of them is to help small and medium businesses everywhere in getting better financial coverage and lateral financial connections with the rest of the globe. Through the use of TenX’s digital wallet, entrepreneurs are in a position to swiftly convert altcoins to fiat currencies that they can, later on, redirect to business ventures, purchases as well as payments. The word is dynamic and is quickly changing. The speed at which Cryptocurrency is taking over is a vivid indication that traditional financial institutions no longer hold the forts so well and that other financial demands are emerging that require attention. Moreover, the globe is faced with a growing need for tearing down the borders seeking for a complete financial and social inclusion (Vigna et al., 2016). Blockchain technology has the potential to address the concern.

Different studies published to give an insight of the impact of this new form of currency to the economy one of this researchers is one from Singapore Management University which focused explicitly on the impact of Cryptocurrency on the payment landscape a piece of information which is supposed to benefit interested parties such as banks, customers, payment providers, and international money transfer operators. From a consumer’s point of view, one might say that Cryptocurrency is just one of those electronic payment systems, which in this case, when the current payments systems are efficient and fast, then crypto will not bring any additional benefits. The real impact of Cryptocurrency is evident to international money transfer operators since the current options are costly and usually take a considerable amount of time Cryptocurrency offers lower charges compared to current global current currencies the impact of Cryptocurrency is expected to be positive for international consumers(Dennis& Paul 10 ). Banks, which are the most significant aspects of the economy, will benefit from the Cryptocurrency through efficient payment mechanisms of inter-bank payments; this makes the world economy more efficient and productive due to time-saving methods offered by crypto. From the above insight, it can be seen that the most significant impact of Cryptocurrency is making the running of economic activities easier cheaper and efficient, an aspect which will contribute to the growth of the global economy to a high percentage. Economics is an inevitable aspect of the society; it determines the standards of living and the situation of the global community and hence makes it an issue that needs critical analysis and evaluation at any point in time. Economic stability is the yearning of every country; however, different aspects of the commercial world make it difficult to predict how the financial future of the global community will look. The mutating nature of the economy and manipulation from governments and authorities makes it so challenging to come up with a currency or means of exchange that is completely stable and does not have biased outcomes. Cryptocurrency has been a topic of discussion about its potential on the future global economy.

The traditional currency has been in use for quite a long time, and despite the new inventions still holds the world’s economy; however, cryptocurrencies prove to be better since Cryptocurrency provides greater access to credit. Credit both long term and short term loans play a huge role in the growth of the economy and since cryptocurrencies only require the internet technology credit services will be available to any person who has data connection compared to traditional currencies which are highly regulated, and individuals have to go through considerable procedures to access loans. Individual ownership is also an aspect that makes cryptocurrencies more convenient and promising in the future of economic prosperity in that traditional currencies banking or credit card systems involves transferring the stewardship of one’s funds and assets on a third party which can exercise any power on the stated economic units. Accounts can be closed at any time in the traditional financial system with limited access to inquiry and explanation while in the crypto world unless one has delegated the management of wallet to a third party, then that individual is the sole owner of the public and private crypto keys (Conley & Paul 8). Security is critical when it comes to economic growth dealing with issues like fraud, which significantly affect the economy. Once a crypto-currency transfer has been authorized, there is no option to reverse like the case of “change-back,” which is common in credit card companies this reduces fraud to a vast percentage (Alqaryouti & Omar 2019).

Despite the mentioned benefits, there are many bottlenecks that accompany the use of crypto-currency that make it difficult to entrust the future of the economy on it. A financial crisis is one of the most prominent challenges in the economy, which requires a well understood and practically tested financial system. Cryptocurrency has never been through a financial crisis situation, and therefore it is difficult to predict the outcomes when such currency goes under the challenging situation of financial challenge (Alyahyee et al. 2020).

Cryptocurrency comes with a massive question on the legal grounds. Despite the fact that there is a need for a more diversified economy, it does not mean that the world should transform into an economy that is a time bomb and can crush its participants at any time. From the view of civil law, Cryptocurrency can be seen as a measure of value and not a form or other form of money due to the little agreements that happen between the parties involved (Srokosz & Witold 2). The anonymous nature of cryptocurrency users makes it difficult to regulate, meaning that there is limited control over the currency, and in that case, it makes it a readily available ground for illegal activities such as tax evasion that will significantly affect the economy. Controlling criminal activities is the cause of enormous failure in the Cryptocurrency because, from the look of things, crypto aims to give criminals a safe haven where they can do their activities with limited disruption. The economy has suffered from criminal activities in governments such as corruption and money laundry, and therefore for a financial system to perform well, it has to work together with the authorities. Money laundry is one of the most significant challenges that has affected many governments in their efforts to curb corruption and misuse of public funds; however, crypto-currency does not offer a section for the authorities.

Cultural adoption of crypto-currency is another considerable challenge. For economic growth, all aspects of the society must be put on board the world is still undergoing transformation and not all individuals have access to the modern currency culture this means that adoption of these new forms of transactions will have to take time for it to be adopted a factor is not practical in the financial world. The integration of crypto-currency to the modern economy is the most challenging ideology to implement since it involves replacement and completely changes from the existing system, which will be a challenge for global corporations to implement(Niranjanamurthy, Nithya et al. 13).

From the above discussion, it’s safe to conclude that the ambitions embedded in the whole cryptocurrency financial issue come with great hope to the global economy. It is clear that there is a need to improve current systems to be able to achieve the desired economic growth. The world is still yearning for a more stable economy that cannot be controlled by the interests of a few influential participants. Cryptocurrency has huge potential basing in mind that the world we live in today is migrating to the digital world in a fast way. When the world has moved to a 100% computer literacy, the convenience of Cryptocurrency will have gone high to appoint that it becomes inevitable to incorporate into the financial system. Despite the potential, there is a lot to be done for Cryptocurrency to be the custodian of the future economy in that factor like security and control of information has to be highly regulated since for any system to be legally recognized it has to incorporate strict aspects of law which currently are not evident in the cryptocurrency world. Information about users of Cryptocurrency is crucial since it helps avoid the burden of criminal activities associated with the use of such forms of currency. Adoption of Cryptocurrency will take time, but if it comes with the suggested changes, then it will have a considerable impact to the global economy and the world can safely move to a more stable economy with colossal efficiency and limited disruption however if the suggested changes are not implemented Cryptocurrency will be existent like any other form of transaction but will not replace the current systems. Despite the fact that all the above Millions of people are in a position of investing, sending money across the borders, saving money as well as starting businesses through cryptocurrencies. Despite the challenges facing the use of Cryptocurrencies, they still have a chance of competing with the outmoded currencies as the core methods of payment. The rate at which the cryptocurrency industry is developing is earthedusson.comshattering. Cryptocurrencies present great opportunities for poorly banked countries. The interest rates in cryptocurrencies are generally fair that subsequently translate into more instability amongst the persons who request loans. Moreover, technological advancement and use will lead to a financial revolution that will make everyone more financially connected, enabled, and empowered. Cryptocurrency transactions are associated with low costs. The use of cryptocurrencies is also associated with increased transparency of transactions. Since cryptocurrencies and blockchain transactions are digitized and automated, they are said to be tracked in distributed ledgers. The use of cryptocurrencies will grant more power to entrepreneurs. As a matter of fact, it will be a matter of time whereby the cryptocurrencies will definitely find ways into our lives, shaping them for better with inclusion in mind and economic growth.

Work cited

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