The advancement in technology over the years is evident and transcends all sectors, including the finance sector. How we process payments has evolved from the trade by barter method to paying via currencies. However, while using a physical bill has proven effective so far, new forms of technology have introduced a different, secure, and seamless method of payment known as a digital currency.
Cryptocurrencies are categorized under digital currency and secured by cryptography which helps keep them transparent. In a 2018 study, researchers found that the cryptographic system is a strong and reliable medium for new digital currencies. As digital currencies continue to make the news, it begs the question of whether it will transform payments or be a threat to government-issued currencies.
Will Bitcoin Ever Replace Government-issued Currencies?
Bitcoin is a popular cryptocurrency and now more than ever, investors are taking deliberate steps to own bitcoin after seeing its tremendous impact in the finance sector in recent years. Bitcoin is the first decentralized peer-to-peer payment network that was launched and several other cryptocurrencies have come to exist after it. Regardless, it has managed to maintain its top position and has improved its authority in the finance industry.
Bitcoin has consistently improved since its launch in 2009 and just recently in December 2020, it surpassed its last all-time high of $19,783 and pushed to over $23,000 with a current market cap of over $428 billion. The statistics are mind-blowing and it’s beginning to look like a threat to government-issued currencies.
What’s more, is that as the traditional currencies, you can use bitcoin to pay for goods and services, which is much easier and cheaper. Most people would do anything for a low-cost transaction that would take only a few minutes. There are also several improved exchanges such as the bitcoin champion that allows an easier way to trade and invest in bitcoin at your convenience.
Everything about bitcoin points towards a better and seamless way to make payments and also invest for the long haul. But the question of if it will ever replace government-issued currencies leaves us an indefinite answer.
Despite how popular bitcoin is and the authority it has gained over the years, the chances of it replacing the traditional currency completely are still bleak.
This is due to several factors such as the decentralization of bitcoin, which makes it a little complex to track transactions and reverse failed or wrong transactions. It could also be due to scalability, as bitcoin is yet to get a global audience and coordinate hundreds of thousands of transactions like a traditional bank would.
To gain the trust of the global audience, some more work will still have to be done, as most people would have to be convinced to choose digital payments over what they’ve been used to for many years.
However, bitcoin is gradually infiltrating the financial sector globally and with its rapid growth recently, there might be more room for it to thrive.
The future of bitcoin looks promising and with the constant inflation in the traditional currencies, more people will continue to embrace the digital payment option. It might take a while but digital currency is the future!