The concept of money is not something, which is very new. The earliest accounts of using money as a form of transaction date back to the 7th century. The Lydians started using coins by basing them on the value of goats!
They found that using goats as a currency form can be tedious and difficult in every scenario. What Lydians did can be looked upon as the birth of the modern currency systems.
The advent of cryptocurrencies like Bitcoin has forced the global community to go back to the story of Lydians and the invention of the modern currency.
In this article, we are going to look at the effects of Bitcoins on global financial systems. In addition, we will discuss why traditional currencies have failed us in a major way.
Traditional Fiat Currencies and their Valueless Existence
Open your wallet and look at the currency notes within. What dictates or commands the value of the cash you have in your wallet? Like the Lydians, which used goats to measure the value of a currency, does the modern world and all the experts have something similar?
The answer is ‘No’, we do not have anything to back global currencies against. The next question, which would come naturally is why. Why doesn’t the world have anything to secure the value of currencies?
The answer to this question is because the world has been living from one financially mismanaged moment to another. Our currencies hold value simply because our governments and central banks state they do! It is as simple as that.
This is why the cost of a loaf of bread in Zimbabwe is One Dollar today and Ten Dollars tomorrow morning. Better economies and more developed countries use financial complications like bonds, money printing, and other legislations to state that this the value of a fiat currency.
However, at the end of the day, crisis situations like the pandemic, wars, and natural calamities are enough to shake that drastically.
The Rise of Digital Payments and Currencies
We are no longer living in times where ‘wants’ guided our monetary decisions. The world is looking for convenience and efficiency in monetary transactions and payments. This is why digital wallets and payments are slowly replacing cash in transactions.
Sending One Hundred Thousand Dollars to someone in cash bills can be an impossible task. You can simply log into your Net Banking account and wire transfer the same in a matter of few seconds.
This helps in speeding up processes, especially in trade and commerce. It also allows for limiting corruption and allowing money to reach into the right hands.
The world, which has been experiencing the convenience of digital payments and wallets now wants more. It wants something, which can completely redefine the experience of using money forever.
Platforms like the bitcoin circuit are emerging as hotbeds for individuals and groups looking to take financial transactions, increased security, and convenience to the next level.
The Promise of Bitcoins and Cryptocurrencies for Future Financial Systems
Before we dive deep into the promise of how Bitcoins are altering the financial systems, let me raise some questions for you-
- Do you like how banking companies charge a hefty commission every time you make a transaction?
- Have your business’ profits suffered because multiple agencies charge commissions and other fees from your hard-earned payments?
- Would you like to know a financial payments system, which allows you to enjoy all the benefits of your own money?
Saying yes to any of the above questions will increase your chances of loving Bitcoins. The decentralized nature of Bitcoins makes it stand above all regulations and compliances.
While you may start rattling off the negatives, it is important that you pay attention to the biggest positives- your money in your own hands and not dictated by anyone else.
Consumers all over the world need something, which is both convenient and financially beneficial for them. As a store of value and as a transaction, Bitcoin successfully ticks both these checkboxes.
While there are multiple governments, which are engaging with Bitcoins, others are acting a bit too skeptical. Backed by strong lobbies, which do not want their profits or authority to decrease, they are opposing Bitcoins and other cryptocurrencies as a golden scam. Nothing can be farther from the truth.