History of cash evolution
In early societies, the need for cash arose from the exchange of goods for goods, which used physical objects such as precious stones and oysters to value. This need was an evolution of the value of cash as governments turned to precious metals and minted gold and silver coins. Gold and silver coins were both valuable and recognized all over the world.
With the establishment of banks and printing paper money, people gave their gold coins to the banks due to the limit of paper money. They received the equivalent of paper money, so paper money was equal to the banks’ gold reserves. This system was not so bad, but unfortunately, with the transformation of societies and political dangers, it was forgotten, and gold was almost eliminated from the backing of paper money, gold was replaced by foreign exchange reserves and gross national product, and in fact, a concept called unsupported money was created by the Central Bank. It is printed that with these interpretations, anything too much is worthless and causes inflation.
With the advent of e-banking, people returned their unsupported paper banknotes to banks and received credit cards instead. So the effort to make online cash started.
What are the standard features of all cash?
Be a place to store value.
If the value of money changes drastically in the coming days, people will not use it and turn to other commodities.
As a unit of consumption account
You need to relate the value of money to the value of something else, like ten oysters per bowl of soup.
To be used as an exchangeable device.
Easily anyone else is willing to accept them as a means of payment.
And the same features that make a currency used as a common currency include durability, easy portability, divisibility, and public acceptance, which cryptocurrencies also happen to have in common.
Characteristics of cryptocurrencies
How to accept cryptocurrencies as currency? To answer this question, it is necessary to look at the features of cryptocurrency:
Cryptocurrencies are data and are recorded in a ledger and distributed in each node or node. To precise cryptocurrency data, all nodes must be cleared, which is not possible.
Easy to carry
Cryptocurrencies have no restrictions on transfer, just like banknotes in a bank account. All you need to transfer money anywhere in the world is a computer or mobile phone and internet network to send or receive requests via blockchain.
Many existing currencies are divided into smaller parts, such as the dollar, divided into cents. For example, when you buy bitcoins from a cryptocurrency exchange, you can easily buy up to a few decimal places up to a few bitcoins.
At present, the only aspect in which cryptocurrencies have performed poorly against government banknotes is acceptance as a tool for exchange. However, the world’s economic situation is changing rapidly. The further we go, the more they become known, the more public acceptance, the higher the exchange rate so that some exchanges offer cryptocurrency payment gateways.
As mentioned in the history of cash, governments print money to cover public spending, and this increase in printing is the most important cause of inflation. Cryptocurrencies such as bitcoin have a specific software acceptance criterion for offering: no one has the right to produce bitcoin under any circumstances. The offering of bitcoins is based on the existing algorithm based on the number of specific transactions.
As long as there is money today, we should wait for the general acceptance of cryptocurrencies. On the other hand, despite the opposition to bitcoin and cryptocurrencies, many fans and enthusiasts believe in the future of bitcoin and cryptocurrencies.
Do not fluctuations in the price of cryptocurrencies invalidate it?
Some researchers have cited the sharp rise in the price of bitcoin as evidence that it is not money. Because something that becomes nineteen times the price in a year can not be a means of valuation, but it should be noted that this issue has a history in today’s traditional credit currencies.
Theories in favor of replacing cryptocurrencies with cash
In the first definition, we go to Satoshi Nakamoto, the creator of Bitcoin, who considers Bitcoin to be a peer-to-peer system of electronic money. With the description of the history and features of this electronic cash, you are somewhat familiar with this definition.
I think this is an exciting, forced journey, but governments want to dominate it. Bitcoin is exciting because it shows how simple and easy it is. Bitcoin is better than cash because you do not have to carry it physically, and of course, for large trades, physical money will be very annoying.
Cash is disappearing, and cryptocurrencies are certainly a far better way to transfer value than a piece of paper. Bitcoin is another example of human fashion behavior; Because it costs a lot to buy it right now.
Tom Lee, founder of Fundstrat Research
According to the performance of Bitcoin after the market downturn, the price of this currency will reach 91 thousand dollars before March 2020! Tom Lee has been predicting high prices since Bitcoin was under $ 3,000. Earlier in October 2017, Tom Lee had predicted that the cost of bitcoin would reach $ 25,000 by 2022.
Politicians and citizens may have this question in mind: Why do we need all this? We have oil, gas, coal, and various metals… everything! But we need to make more progress. This is what we need.
The Stone Age did not end because of the blue of the stone; Rather, that era ended only with the advent of new technologies. And now newer technologies are appearing in the world. We should not be left out of the competition in this area (blockchain). One of the most common criticisms of buying and selling bitcoins or other cryptocurrencies is that they cannot be an excellent alternative to cash due to price fluctuations. In fact, with a bit of research in the field of price fluctuations, you can see that such significant changes also occur for cash! We ignore the price fluctuations of money because we are not exposed to it, and the government reduces its intensity by controlling interest rates.
Cryptocurrencies in their current form may not have enough capacity to accommodate new users. The findings show that cryptocurrencies, in their current state, are too volatile and limited to become a reliable means of payment for global transactions.
However, this criticism is somewhat bizarre; Because it is difficult to find someone who can see cryptocurrencies as an alternative to the US dollar in their current assessment. Many proponents of cryptocurrencies refer to these currencies as “digital gold.” They believe that, at least for the foreseeable future, cryptocurrencies will probably be used alongside the common currency as a pre-transaction before they can be used for day-to-day transactions. Value reserves will live.
Cryptocurrencies are a new step in the history of money, and according to the history of money, it can be said that the rotation recorded from commodity money to coins, from coin to remittance, and from remittance to banknote throughout history, a new transformation towards the centralization of currencies. Cryptocurrency is likely to be an alternative to common currencies.
If you want to understand better whether cryptocurrencies can replace cash, we suggest reading the article relationship between artificial intelligence and blockchain.