While Covid 19 creates economic upheaval in some areas, the price of other assets has soared. Cryptocurrency is a digital asset that is certainly soaring.
Giving rise to its legitimacy, it’s also convertible to cold hard cash if you wish. Cryptocurrency works as a medium of exchange where transactions and ownership records are stored in a decentralized ledger, called a blockchain.
Opposed to central banking, every transaction is public record and cannot be altered or reversed once initiated. Bitcoin was the first and probably most well known cryptocurrency created so far. However there are several other coins (tokens) popping up. Many more are emerging all the time. Cryptocurrency looks that it will emerge as the “gold standard” of currency in future transactions, accelerated by pandemic protocols and impacts on the economy.
Cash is no longer king
Prices of gold and silver are fluctuating and in hard times. Cash is no longer accepted at places of business, as fears of the disease spreading run rampant. These days cash isn’t king. Merchants are quick to push a tap-sale or touch-less forms of payment. The less human contact, the better.
Coincidentally, the value of cryptocurrencies (not just bitcoin, but ethereum, litecoin, and others) are steadily rising. In changing times, people are opting out of traditional forms of wealth management governed by protocol and legalities. Taxes, rules and regulations saying when or how much money can be moved at one time are a hindrance to some. Deregulation is a big part of what makes cryptocurrency so appealing.
Cryptocurrencies are unregulated by federal governments or banks. Governments and financial institutions have no say in the vast wealth of money held or transacted in the form of cryptocurrency. Financial heavyweights are starting to prefer cryptocurrency because of the decentralized nature of the transactions. No one can tell you when or how much crypto you can move at any one time. You call all the shots.
Be aware that the potential for theft or loss is high. If your private e-wallet number is accessed by anyone, they can transact all your assets irreversibly. Don’t lose those keys!
Why is Bitcoin so popular?
Bitcoin is popular because there is only a limited amount of it available. Computers are used to “mine” bitcoin by essentially guessing a massive string of numbers. There are only 21 million bitcoins that can be mined in total. Computers mine bitcoin by running sequences of long numbers to unlock each one.
A bitcoin is identified by a sequence of an astronomical amount of numbers which takes a large amount of computer processing power to successfully unlock or mine a bitcoin. There are just under three million bitcoin left to be mined. Bitcoin is essentially backed by enormous amounts of computer processing power due to the energy that goes into mining one coupled with finite availability.
The next step: Digital dollars
Companies are moving to fully digitized, computerized logistics. Uber has all but eliminated the need for human logistics. They use blockchain and artificial intelligence, plotting the most feasible routes, geographically linking users with drivers.
Bookings are posted publicly, drivers and deliverers dispatched based on computerized route calculations. It truly is next generation. A support team is outsourced. Uber and other corporate giants like Amazon are well placed to utilize blockchain technology. It’s about decentralized, automated dispatch and delivery. Everything is publicly recorded for fact-checking.
There is industry speculation that the next logical step for these digitized companies is to issue their own form of currency ICO (Initial Coin Offering). Uber has done so, creating an Uber Eco Coin. Uber CEO Dara Khosrowshahi said this month on CNBC that Uber will consider accepting cryptocurrencies. The future is now!
The mining industry is realizing the value of creating a token backed by assets (minerals) held in the ground. Companies would use said token to finance production. After favourable drill results, a tradeable token can be issued based on the value of the inferred resource in the ground. As buyers pay for tokens, funds are used to mine valuable minerals — financing production. Once the resource is mined it can be sold or traded and the token holders paid back with interest.
No cash exchanged
In the real world, coffee and sandwich companies dabble in their own forms of digital currencies. These are rewards points, cards and “currencies” specific to their organization. Think Canadian Tire Dollars or Subway Tokens. The future will see these companies issuing their own tokens worth real products and convertible to other forms of cryptocurrencies.
Your watch, fingerprint, contact lens or facial recognition technology will identify you to the coffee shop robot who toasts your favourite bagel and prepares your coffee. No cash is exchanged. The balance automatically deducted from your e-wallet. Perhaps I want a sandwich instead of coffee and carry “coffee coin” in my e-wallet? I will easily exchange one crypto-currency for another, just as we do with existing global currencies.
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The future of crypto
It has been shown that cryptocurrencies can be “backed” or evaluated by limited supply and demand, inferred resources or existing assets. Eventually people will issue their own token to bring about instant value to their life. Now, with more people than ever becoming independent contractors and entrepreneurs, many look to launch their own personal crypto currencies.
Think about a wealthy yacht owner issuing token to launch an exclusive global luxury tourism business. Yacht token owners are effectively buying themselves a spot aboard a floating palace off to faraway places and the yacht owner has financed his trip to exotic locations around the globe.
Another example – a starving artist who comes into great wealth by issuing a finite number of tokens to fund his or her future art projects. A number of unique paintings are produced by the artist who can then sell the works and raise the price of their cryptocurrency to satisfy the investors. People will welcome the ability to generate their own valuable income streams via cryptocurrency.
Propelled by a pandemic world
A wide rejection of abuse of personal data and privacy breaches means people are more guarded than ever of their personal profiles. That includes their opinions and consumer criticisms. People will welcome with open arms the ability to actually be paid for their consumer feedback or social media participation.
There’s a myriad of social media giants competing for an eye on your digital footprint, email, internet search history and activity. So the social media conglomerate that sets precedence and emerge victorious above all is one who can offer a reward for use. That reward will be in the form of token, also known as cryptocurrency.
A digital revolution
Cashless society becomes more of a reality with the pandemic and new cryptocurrencies emerge. And people are beginning to understand real value in digital tokens. The pandemic changed the way businesses transact and pushed a great number of businesses online. As store fronts and shops shutter up, the digital world opens. And that grows as new forms of cryptocurrency emerge daily.
As people become more educated and interested in the decentralized nature of cryptocurrency the rise will only continue. Digital currencies are set to dominate the future. And for the early adaptors, the payoff is sure to be substantial.