How often do you go shopping in a department store or visit a bank for a mortgage?
This is because the global pandemic has changed the way we conduct financial transactions – we are now living in a world of online experiences! A range of innovative technologies is changing how we use and manage money.
Yes, we are referring to cryptocurrencies!
Though still in its early stage, cryptocurrencies are undoubtedly the future of money. They are faster and more robust technologies that are challenging the financial institutions that manage money. We are witnessing the era of transformation for finance.
It all started with the dawn of the pioneer cryptocurrency, Bitcoin, back in 2009. Its success spawned the birth of several cryptocurrencies over the following years. And today, the market cap of the crypto industry is almost $2.5 trillion!
But as crypto adoption is on the horizon, you’d have the same question in mind: Is cryptocurrency the future of money?
Functions of Money – How Crypto Fits In
They say, money is what money does. This means that our good, old money serves us numerous functions: It acts as a medium of exchange, you can store it, and it provides a unit of value.
Medium of Exchange:
Back in the day, people used the barter system. They used to barter commodities and goods between them. A farmer could trade his produce with another person’s goods – equating to an equal value. But there was one major problem: defining the value of two different commodities.
This puzzlement led to the invention of money – a common denominator. When it comes to crypto, there is still hesitancy in its acceptance as a medium of exchange. You cannot force someone to accept crypto unless it is a legal tender like pounds or dollars. But crypto adoption is skyrocketing with time. Tech giant Tesla, for instance, has started accepting it in exchange for its products.
Carl Runefelt is a global crypto leader, analyst, and influencer who believes the future is all crypto – will replace the money one day. He says, “Bitcoin now is accepted in more countries than gold as legal tender, which means that Bitcoin is now more useful than gold which has been the form of money in the world for many years.”
Runefelt is extremely confident in the prospect of cryptocurrencies replacing money. He foresees, “We live in a digital world, we need digital money, and we need non-political digital money, and Bitcoin is the resolution, and I think that right now people are realizing it, but it will take some time before we see the full transformation.”
Storing the Money:
Have a lot of cash? You can store it somewhere and spend it wherever you want to. Crypto gives you this ease as well.
But here is one concern: its unpredictable fluctuations in value. As the crypto market continues to grow, significant price fluctuations will come to an end. In fact, investing in cryptocurrencies can become a rewarding option.
Carl Runefelt regularly says on his YouTube channel, The Moon, “Looking at Bitcoin in the short period defeats the purpose of what Bitcoin is. Bitcoin is a long-term solution to a broken financial system, and I think in the next five years or in the next 10 years, that’s the kind of time horizon I have when I look at Bitcoin.”
Unit of Value:
Since money is not volatile, it does a great job of fixing the value of goods and services. Crypto, on the other hand, struggles in this area owing to massive unpredictability. For example, you purchase something using cryptocurrency, and the next thing you know, the cryptocurrency price shoots up. This means you end up losing a lot of money, right?
But it works the other way as well. Say you sell something in exchange for crypto, you’d be the luckiest man on earth if its value jumped through the roof.
Crypto analyst Carl Runefelt predicts, “I am very confident that this will be a very good investment. I believe that Bitcoin is not only going to go to $500,000. I think that Bitcoin is gonna go to five million dollars per Bitcoin in today’s money. Obviously, with inflation, bitcoin could go to trillions of dollars per Bitcoin. Actually, it will because it is inevitable, but because the dollar will collapse at some point, that’s just something that is going to happen because it’s inevitable, but I believe that in today’s money, Bitcoin could go to five million dollars.”
He further adds, “Sell coins when they hit the top value and purchase another coin, take your profits, and buy other coins as cryptocurrencies are highly volatile. This applies to everything, whether it is Bitcoin or any other coin.”