Money, in its different forms and presentations, is a means of doing business and exchanging products and services around the world; however, with the appearance of digital money and other forms of payment, it is worth asking what will be the future of money physical as we know it today? What is the influence of cryptocurrencies in the current socio-economic context? These questions arise when seeing the growing digitization at all levels of society; in this article, we will analyze these questions.
Variations of money over time
We see that the abstraction of money increases due to the number of new opportunities presented. As can be seen, each socioeconomic change has a direct impact on money. The concept of money has been presenting variations over time significantly, since the beginning of humanity with the so-called “barter” and spices, passing through paper money and metallic, until today, where we talk about digital money and cryptocurrencies.
Will physical money disappear? At least in the short term, this may not happen, since face-to-face money is still handy for the whole of society, for example, to carry out any operation that requires a certain discretion that does not leave a trace or to make purchases in places where they do not have technological tools to manage payments (for example communities that do not have access to the Internet or the financial system), it is in these cases where the cash would still be needed.
The era of digitization has arrived
There are currently digital currencies and cryptocurrencies (Bitcoin, Ethereum, Dash, etc.) and tools to save or manage these resources (for example, wallets). Everything that implies advancing in digitization, in some way, will help the environment and the economic cycle since it allows everyone to participate more actively in the economy.
The important thing is that there is a wide range of financial instruments that the end-user can use or choose between several alternatives, which is positive since it generates “healthy competition” in addition to reducing shipping costs, opening up more possibilities for growth, and having greater globalization due to the appearance of new channels and online platforms to help more people, regardless of where they are.
Cryptocurrencies in the current context
Cryptocurrencies, such as Bitcoin and Ethereum, sometimes behave as if they were “stocks” on the stock market due to their instability in price (they constantly rise and fall due to supply and demand). Investors are currently looking at Bitcoin and other cryptocurrencies with greater interest due to the possibility of rapid profitability, and that is why their high volatility. However, other factors have allowed cryptocurrencies (especially Bitcoin) to have the current value and reputation, one of these factors is the limited number of units, its support in blockchain technology, and its decentralized system, all these characteristics ” contrast ”with traditional banking, in which there is no limited number of units (each government can create new units if it wishes), these currencies do not have a physical equivalent (they are based on a promise of future payment) and have a centralized system controlled by the government of the day or central bank. All these features have made many people adopt the use of cryptocurrencies instead of traditional FIAT money.
Challenges that cryptocurrencies have for their massive use
For cryptocurrencies to be used globally, they must face the following challenges:
- A sufficient number of physical ATMs will allow people who are not related to technology or do not have access to the Internet to interact with cryptocurrencies.
- Several quality companies provide the wallet service; this point is essential to access financial services of high added value with safe, intuitive, and versatile platforms.
- Laws that protect and encourage their use (avoid laws that restrict them), this point is fundamental since it will allow cryptocurrencies to develop and not be controlled by governments and external organizations.
- Education and cultural change, this point will allow people to understand the advantages of using a reputable cryptocurrency, as well as helping people to adapt to change and the new economy.
- Access to the Internet at a global level, only through access to the Internet at a global level, can there be an environment where opportunities, tools, and benefits can reach all people.
As we can see, many factors influence the current socio-economic context, in addition to the fact that there is still a long “way to go” for cryptocurrencies; however, little by little, it is being seen how cryptocurrencies are becoming part of the ” day by day ”of many people, companies, and organizations.
What do you think about this topic? Do you think cryptocurrencies are the best option in the socioeconomic context that we are currently experiencing?
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