In these changing times, all that seemed to be in the distant future is slowly becoming true. One such advancement is the inception of cryptocurrency. It has undoubtedly changed how we look at services, goods, and businesses. Cryptocurrency has existed for more than 10 years, but will it be successful enough to erase out the traditional monetary system? Let us find out in this article.
We shall start by discussing the various arguments put forth against the working of central banks under the traditional monetary system. Then we will go on to see the scope of Crypto as an alternative to money by following the advantages of introducing cryptocurrency into the global market.
The disadvantages of banks under the traditional monetary system
- Banks resonate with that of power politics. The traditional monetary system as far as banks are concerned is almost like a monopoly that in a way snatches away the rights of certain people.
- Banks are like obscure yet opaque bodies of interference. The idea that something so non-transparent governs the economy of almost the entire world is overbearing. It being an institution also holds the power to manipulate the value of fiat currencies.
- Another major drawback of paper currency is that banks at any time, following their vested interests, can increase the supply of money thus directing a nation into inflation and hurting the consumer mentality.
- Interest rates are always too high for banks. The bad news is, trends hardly show interest rates dropping, thus making it difficult for people who want to loan money.
- Banks can also lead to instances wherein to keep inflation low, policies are implemented which in turn paves the perfect path for unemployment. The way banks are structured, even if a person needs a loan, he would probably be in debt for the longest period.
Let us now look at how cryptocurrency might change the monetary system. For that, we shall go on to discuss the advantages of cryptocurrency.
The pros of Cryptocurrencies
You cannot disagree that whenever you think about money, even if it is plastic money, you become conscious of fraud. With cryptocurrency, you can brush off that anxiety and transact in safety. There is also no question of intermediary banks or loss of transaction data since everything is recorded in the blockchain network and is safer than dealing with fiat currency bills.
Money transfers have no doubt become pretty fast, but in comparison to cryptocurrencies, it still has a long road ahead. Traditional currencies, if transferred from one account to another, takes hours and even weeks in some cases. Crypto transfers are instant, without the headache of any transaction fees.
Starting from online websites to local gas stations, we are almost always hesitant to use cash. However, even online payments require a lot of unnecessary fields to be filled up before fixing a deal. Not to mention the issue of fraud. For these reasons, crypto in the coming years will pose to be utilitarian.
Self-control and security
Since crypto is decentralized in nature, you are your asset’s sole master. You have all the power to control your own money without any kind of interference. In some cases, crypto-trading has offered individuals with no job at hand, temporary peace of mind. For more information visit.
Alternative to money
Starting from inflation to financial instability, fiat currencies have faced it all. Many economically unstable countries find it difficult to depend on these traditional currencies and seek an alternative that is devoid of interest or exchange rates. Crypto might have a good chance at it.
Central banks and their monetary system are as of now ruling the economy of the world. Though it would still take some time for cryptocurrencies to come at par with fiat currencies in terms of global acceptance, the future of crypto taking over is not too bleak.