CRYPTOCURRENCY: IS IT A SUSTAINABLE MEANS OF PAYMENT?

Cryptocurrency can be traced back to 2009 when Satoshi Nakatomo came up with Bitcoin. Today, Bitcoin is now worth over $46,000. This growth of Bitcoin has made a lot of people extremely wealthy. However, one of the most asked questions in this era is whether a cryptocurrency will be sustainable shortly to come.

A lot of people have made money off of Bitcoin and other currencies through Trading and holding. Holding is when a person buys Cryptocurrency for a long time, hoping the price would rise and he would make a benefit. Trading has to do with speculations of a price rise every day to make money. However, Trading has been made easy as trading bots are doing them, and they make a lot of profits for its users. For instance, there are profits through the Quantum AI you get when you trade with the bot.

At the end of March 2021, Tesla Inc. started accepting Bitcoin as a mode of payment. This made the coin of more value earlier this year. However, because of the market fluctuations based on its volatility, the iconic car-producing organizations have ever since stopped accepting Bitcoin as a means of payment.

Many people regard Cryptocurrency as the currency of the future; however, is it a sustainable currency? Will we have it better if we used cryptocurrencies in place of fiat money? Cryptocurrency has potentials; however, will it last?

The market volatility makes fluctuation in the currencies occur every minute of every day. Earlier in 2021, when Tesla bought into Bitcoin, the price of Bitcoin surged to around $60,000. People even predicted that the price would go up to $90,000 before the end of the year. However, a quick twist occurred on a crypto market that saw the currencies’ prices reduce drastically. Even the much-hyped Bitcoin reduced from $60,000s to $30,000s. Now, the coin is trying to gain its ground again as it is currently at $46,000.

Traditional money is bound to go extinct as there is now what we call the cashless policy. Also, cryptocurrencies are anticipated to be the next big thing after fiat money. But can they be? With all the fluctuations that occur on the crypto market every day, would it be safe for the world to adopt Cryptocurrency as its new mode of payment?

For a currency to be stable and accepted as a means of exchange, it must possess the following characteristics. Does Cryptocurrency have these characteristics? Can these coins gain these characteristics to be an accepted means of exchange?

  • Intrinsic Value: For a currency to be accepted as an accepted means of payment, it must have no intrinsic value. This means that before it can be accepted, the currency must be meant for only one thing; buying and selling. Take, for instance, Fiat money has only one use, which is why it is accepted as a means of exchange. Cryptocurrency, on the other hand, has intrinsic value.
  • Backed by Government: Another characteristic of accepted means of exchange is that they have the government backing that uses them. For instance, the USD is backed up by the United States government; the British government backs up Pounds Sterling. However, Cryptocurrency is decentralized; it isn’t backed up or controlled by any government.
  • Unlimited Supply: Accepted means of exchange always have an infinite supply. They can’t be limited in supply because they are used every day. However, Cryptocurrency has a limited form of supply. Take, for instance, only 21 million Bitcoin can be mined, and if that is reached, the supply of Bitcoin will elapse.

It is evident from all the has been listed that Cryptocurrency isn’t ready or doesn’t have what it takes yet to be the next means of exchange. And unless it possesses these characteristics or is developed on, there is a huge problem if it is adopted as a means of exchange anytime soon.

 Conclusion

Cryptocurrency has been making and is still making money for people daily. However, as we’ve explained above, even though Cryptocurrency is regarded as the next currency of the world, it doesn’t have what it takes to achieve such a feat. However, this doesn’t mean that Cryptocurrency cannot attain such heights. The crypto market and Cryptocurrencies have a lot of potentials. Let us sit back and see what it will unfold as.