Bitcoin Forum
September 19, 2018, 04:31:08 AM *
News: ♦♦ Bitcoin Core users must update to 0.16.3 [Torrent]. More info.
 
   Home   Help Search Donate Login Register  
Pages: [1] 2 »  All
  Print  
Author Topic: How well do cryptocurrencies fulfil the functions of money?  (Read 144 times)
argio
Copper Member
Newbie
*
Offline Offline

Activity: 112
Merit: 0

Decentralizing Global Banking through Blockchain


View Profile WWW
June 23, 2018, 07:06:15 PM
 #1


How well do cryptocurrencies fulfil the required functions of money, and how will we expect the 'Darwinian evolution' of monetary affairs advance? Here are a few thoughts to inspire debate and discussion - any constructive thoughts and feedback are welcome.

Cryptocurrencies: the potential is there, but still way to go to a perfect solution for money and payments

Never before has any previous form of currency been as purely global as are the newly emerged cryptocurrencies: the market for cryptocurrencies lives incessantly its hectically pulsating and wildly gyrating rhythm 24 hours a day, seven days a week around the globe, across any and all national borders that do not exist for them. The cryptocurrency market never stops the way the operations of SWIFT, Automatic Clearinghouse (ACH) or various central banks that operate only during ‘banking days’ and ‘business hours’ i.e. for around 200 days a year instead of 365 – and why on earth should the transfer of money in the 21st century be dependent on business days and hours representing the past? The cryptocurrency market does not need to stop, as it is dependent on none of those archaic institutions and their business hours – nor on any other institution or government. This market is participated globally by anyone willing – there are no ‘barriers to entry’ that have been raised around banks, central banks and other government and financial institutions handling traditional forms of fiat money – nor should there be any barriers to entry either. The market for cryptocurrencies is more egalitarian on a global scale than any other form of money, and advances in technology are making all this possible. Eventually, the underlying technologies will enable an open, global financial system that is accessible to all.

The most well-known of cryptocurrencies, bitcoin, was introduced 9 years ago, on 3 January 2009, in the aftermath of the beginning of the worldwide financial crisis triggered by the collapse of the Lehman Brothers investment bank in mid-September 2008. While the first years of bitcoin passed as a technological curiosity, an experiment to prove the concept, the cryptocurrency industry started taking pace in 2013-2014 with the introduction and gradual growth of exchanges and consumer wallets to buy, sell and make payments in bitcoin, and the increasing value of bitcoin prompted the development of a number of other digital currencies often labelled ‘altcoins’, the number of which has already increased to more than 1,500 as of today and is growing by the day – while most of those altcoins are not intended to be cryptocurrencies per se but tokens for various purposes in the crypto economy, often based on the ethereum ERC-20 protocol developed for the ethereum cryptocurrency ecosystem, to function as tokens, or means of exchange for various goods and services mostly in digital form, and leveraging the blockchain technology for ‘smart contracts’ or otherwise, there is certainly a Darwinian evolution underway to shape the future winners in the global crypto economy, which will later on form a significant part of the general economy, when the cryptocurrencies and the underlying blockchain technology reach mainstream.

If we go back to the basics of money, its fundamental functions of unit of account, store of value and means of payment or of exchange, very few, or any of the 1,500 potential cryptocurrencies or other digital asset tokens meet these requirements. In the end of the day, no cryptocurrency of today meets all those conditions, not even those that purely label themselves as cryptocurrencies instead of various tokens, i.e. none of them is ripe to function as everyday money, fulfilling its key requirements. If we reflect on them in contrast to these 3 required functions for money:

  • Unit of account: this is probably the easiest one of them to fulfil, as all cryptocurrencies represent units that can be divided into sub-units, like cents on a dollar or euro, but often with much greater decimals – e.g. one bitcoin corresponds to 100,000,000 – 100 million – satoshis
  • Store of value: the wild fluctuations of the cryptocurrency market trying to establish the ‘correct’ levels of valuation (consensus view of the market) for each cryptocurrency, with the combination of news relating to individual cryptocurrencies, countries, their regulatory actions or plans, and the potential or real use cases of such cryptocurrencies bringing them closer to everyday use affecting the market and the pricing of individual cryptocurrencies every day, being too high to make cryptocurrencies reliable stores of value as of today, because the value can substantially go up or down in a very short period of time, without any guarantee of any particular level – it may be better, however, than the currencies of countries suffering from hyperinflation (many people in a number of South American countries suffering from excessively high inflation rates having been early adopters of cryptocurrencies), but not compared to any fiat money of industrialised countries of today, or any commodity such as gold traditionally viewed as a good store of value, even if, at the same time, many attribute bitcoins as ‘digital gold’
  • Means of payment: Again, the massive volatility in the price of cryptocurrencies makes them poor means of payments, as the wild fluctuations in value can cause significant losses either to buyers or sellers of goods or services with bitcoin or other cryptocurrencies, and, because the markets have been generally bullish on cryptocurrencies over the past several years, despite of momentary corrections like January-February 2018, they have been seen more interesting to be acquired and held as investments due to the recent increases in their value rather than an everyday means of payment; becoming a means of payment would require much more stability in the market value of such cryptocurrencies (and relatively less interest to hold them as a speculative investment) as well as low latency, the technical capability of having a large enough number of transactions verified fast enough in the network (a problem that e.g. Bitcoin and ethereum structurally have but which can be solved in different ways such as the ‘lightning network’ project for bitcoin and sharding for ethereum, and some altcoins have been created to better deal with this problem of high network latency, long settlement times of bitcoin transactions)

So, while cryptocurrencies, which are independent of any government, central bank, bank or any other institution, can do away with banks and central banks by definition, and function as solid units of accounts, in general, they do not yet efficiently fulfil the monetary functions of a store of value and a means of payment. These remain major challenges to be solved, in order for a cryptocurrency to be adopted into mainstream use in everyday payments.

For this reason, there is so far no cryptocurrency as a universally recognised means of payment or store of value – the recognition as such has been limited to individual cases. At the same time, this fact, with the key challenges remaining unresolved in these respects, provides vast opportunities to those who try to create best solutions to these problems and challenges. A number of potential routes to solve all the problems and meet all the challenges exist. Time will tell, which solutions will be the winners, but, at the same time, the space ahead is so vast that it allows a plethora of different solutions for different purposes in this new blue ocean of an open, global, decentralised network-based financial system that is gradually taking shape.

In this new era, the power will be of those who decentralise, and not to those who attempt to centralise power – it will be healthier to let one’s power to be ‘cannibalized’ by the technological advances than to lose it altogether when only resisting this tsunami of change. The Darwinian evolution underway will take care that the power to which the traditional incumbents of centralised, closed systems are trying to cling will slip away, and will be transferred to those who build, contribute to or participate the open, decentralised financial systems taking shape. This is inevitable and it is already underway, and trying to fight against it is as futile as is the fight against the windmills – such momentum can no longer be stopped, nor would it make any sense at all to try to stop it.

The only way to succeed and to generate value is to seek and find solutions to the new challenges with the new tools made available, as someone will find the answers anyway, and those answers will shape the evolution of the global financial system of the future, so it is no small feat. What is clear, regardless of the exact characteristics of the eventual winners is, however, that the most powerful solution will no longer be anything closed or centralised, and it will be impossible to maintain any power in such closed, centralised loops, as they will eventually run out of air like balloons – the Internet would have never been as successful as it has become as a global medium, if it had remained a system confined for military purposes as it was originally conceived.

As is the case of the Darwinian evolution, all actors must either be capable of adapting to the changing circumstances and accept the new realities and take new shape, or become extinct. This is what seems to be eventually happening to banks, central banks and the so-called fiat money as we know them – cryptocurrencies and the blockchain-based infrastructure will render many of their core functions ultimately obsolete. The evolutionary train cannot be stopped, but one must jump onboard instead. One cannot win the future through prohibition of products of innovation or imposing ever more regulation, as one can only regulate something that previously exists; this battle can only be won through ever smarter innovation, being better at it than anyone else, and applying it in better and simpler ways.

Like the blockchain itself, or the internet in general, the flow of information and transactions always finds its path to the right destination through replaceable nodes that become ever more numerous and interconnected so that any node can be immediately replaced by many other nodes without compromising the functioning of the network at all despite of any external effort to destabilise it, without any central server or institution behind it that could be attacked – the blockchain train cannot be attacked, as it will always find a way around any obstacles. This architecture of the open global financial system literally brings the power to the hands of its users and takes it from those of governments and institutions.

But rather than rejecting it, any government or institution can become stronger by adopting these technological advances to the benefit of their ‘clients’, be it the people of a sovereign country or clients of a business. While it is always very difficult to cannibalize one’s own power, often it is vital for survival and success, as history itself has proven so many times.

Here are also a few thoughts relating to money, central banking and the cryptocurrencies taking over sovereign currencies: https://bitcointalk.org/index.php?topic=4524280


1537331468
Hero Member
*
Offline Offline

Posts: 1537331468

View Profile Personal Message (Offline)

Ignore
1537331468
Reply with quote  #2

1537331468
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1537331468
Hero Member
*
Offline Offline

Posts: 1537331468

View Profile Personal Message (Offline)

Ignore
1537331468
Reply with quote  #2

1537331468
Report to moderator
1537331468
Hero Member
*
Offline Offline

Posts: 1537331468

View Profile Personal Message (Offline)

Ignore
1537331468
Reply with quote  #2

1537331468
Report to moderator
Hydrogen
Hero Member
*****
Offline Offline

Activity: 910
Merit: 661



View Profile
June 24, 2018, 02:05:22 PM
 #2

I'll go out on a limb and contend a double standard exists which contributes towards crypto currencies acclaimed volatility in contrast to the exaggerated stability of fiat money. There are no fundamental nor intrinsic reasons why fiat should inherently be considered less volatile or deemed more stable. Examples of this are the current venezuelan bolivar and zimbabwe dollars of ages past. Fiat currencies have displayed far greater negative price volatility than bitcoin has in its history.

One thing we can be certain of is bitcoin should theoretically be more stable than the US dollar or any fiat due to its printing being algorithmically limited. The impossibility of bitcoin and some alts being printed out of thin air without limit should make them less volatile and more stable however there are contributing factors and unknowns which prevent that from happening. Someday perhaps when bitcoin is a more established and known phemonea, it may be recognized as exhibiting greater stability than fiat for reasons mentioned above. Crypto currencies are in their infancy and markets have a ways to go before they reach maturity.

charlotte04
Full Member
***
Offline Offline

Activity: 406
Merit: 102



View Profile
June 24, 2018, 04:09:10 PM
 #3


How well do cryptocurrencies fulfil the required functions of money, and how will we expect the 'Darwinian evolution' of monetary affairs advance? Here are a few thoughts to inspire debate and discussion - any constructive thoughts and feedback are welcome.

Cryptocurrencies: the potential is there, but still way to go to a perfect solution for money and payments

Never before has any previous form of currency been as purely global as are the newly emerged cryptocurrencies: the market for cryptocurrencies lives incessantly its hectically pulsating and wildly gyrating rhythm 24 hours a day, seven days a week around the globe, across any and all national borders that do not exist for them. The cryptocurrency market never stops the way the operations of SWIFT, Automatic Clearinghouse (ACH) or various central banks that operate only during ‘banking days’ and ‘business hours’ i.e. for around 200 days a year instead of 365 – and why on earth should the transfer of money in the 21st century be dependent on business days and hours representing the past? The cryptocurrency market does not need to stop, as it is dependent on none of those archaic institutions and their business hours – nor on any other institution or government. This market is participated globally by anyone willing – there are no ‘barriers to entry’ that have been raised around banks, central banks and other government and financial institutions handling traditional forms of fiat money – nor should there be any barriers to entry either. The market for cryptocurrencies is more egalitarian on a global scale than any other form of money, and advances in technology are making all this possible. Eventually, the underlying technologies will enable an open, global financial system that is accessible to all.

The most well-known of cryptocurrencies, bitcoin, was introduced 9 years ago, on 3 January 2009, in the aftermath of the beginning of the worldwide financial crisis triggered by the collapse of the Lehman Brothers investment bank in mid-September 2008. While the first years of bitcoin passed as a technological curiosity, an experiment to prove the concept, the cryptocurrency industry started taking pace in 2013-2014 with the introduction and gradual growth of exchanges and consumer wallets to buy, sell and make payments in bitcoin, and the increasing value of bitcoin prompted the development of a number of other digital currencies often labelled ‘altcoins’, the number of which has already increased to more than 1,500 as of today and is growing by the day – while most of those altcoins are not intended to be cryptocurrencies per se but tokens for various purposes in the crypto economy, often based on the ethereum ERC-20 protocol developed for the ethereum cryptocurrency ecosystem, to function as tokens, or means of exchange for various goods and services mostly in digital form, and leveraging the blockchain technology for ‘smart contracts’ or otherwise, there is certainly a Darwinian evolution underway to shape the future winners in the global crypto economy, which will later on form a significant part of the general economy, when the cryptocurrencies and the underlying blockchain technology reach mainstream.

If we go back to the basics of money, its fundamental functions of unit of account, store of value and means of payment or of exchange, very few, or any of the 1,500 potential cryptocurrencies or other digital asset tokens meet these requirements. In the end of the day, no cryptocurrency of today meets all those conditions, not even those that purely label themselves as cryptocurrencies instead of various tokens, i.e. none of them is ripe to function as everyday money, fulfilling its key requirements. If we reflect on them in contrast to these 3 required functions for money:

  • Unit of account: this is probably the easiest one of them to fulfil, as all cryptocurrencies represent units that can be divided into sub-units, like cents on a dollar or euro, but often with much greater decimals – e.g. one bitcoin corresponds to 100,000,000 – 100 million – satoshis
  • Store of value: the wild fluctuations of the cryptocurrency market trying to establish the ‘correct’ levels of valuation (consensus view of the market) for each cryptocurrency, with the combination of news relating to individual cryptocurrencies, countries, their regulatory actions or plans, and the potential or real use cases of such cryptocurrencies bringing them closer to everyday use affecting the market and the pricing of individual cryptocurrencies every day, being too high to make cryptocurrencies reliable stores of value as of today, because the value can substantially go up or down in a very short period of time, without any guarantee of any particular level – it may be better, however, than the currencies of countries suffering from hyperinflation (many people in a number of South American countries suffering from excessively high inflation rates having been early adopters of cryptocurrencies), but not compared to any fiat money of industrialised countries of today, or any commodity such as gold traditionally viewed as a good store of value, even if, at the same time, many attribute bitcoins as ‘digital gold’
  • Means of payment: Again, the massive volatility in the price of cryptocurrencies makes them poor means of payments, as the wild fluctuations in value can cause significant losses either to buyers or sellers of goods or services with bitcoin or other cryptocurrencies, and, because the markets have been generally bullish on cryptocurrencies over the past several years, despite of momentary corrections like January-February 2018, they have been seen more interesting to be acquired and held as investments due to the recent increases in their value rather than an everyday means of payment; becoming a means of payment would require much more stability in the market value of such cryptocurrencies (and relatively less interest to hold them as a speculative investment) as well as low latency, the technical capability of having a large enough number of transactions verified fast enough in the network (a problem that e.g. Bitcoin and ethereum structurally have but which can be solved in different ways such as the ‘lightning network’ project for bitcoin and sharding for ethereum, and some altcoins have been created to better deal with this problem of high network latency, long settlement times of bitcoin transactions)

So, while cryptocurrencies, which are independent of any government, central bank, bank or any other institution, can do away with banks and central banks by definition, and function as solid units of accounts, in general, they do not yet efficiently fulfil the monetary functions of a store of value and a means of payment. These remain major challenges to be solved, in order for a cryptocurrency to be adopted into mainstream use in everyday payments.

For this reason, there is so far no cryptocurrency as a universally recognised means of payment or store of value – the recognition as such has been limited to individual cases. At the same time, this fact, with the key challenges remaining unresolved in these respects, provides vast opportunities to those who try to create best solutions to these problems and challenges. A number of potential routes to solve all the problems and meet all the challenges exist. Time will tell, which solutions will be the winners, but, at the same time, the space ahead is so vast that it allows a plethora of different solutions for different purposes in this new blue ocean of an open, global, decentralised network-based financial system that is gradually taking shape.

In this new era, the power will be of those who decentralise, and not to those who attempt to centralise power – it will be healthier to let one’s power to be ‘cannibalized’ by the technological advances than to lose it altogether when only resisting this tsunami of change. The Darwinian evolution underway will take care that the power to which the traditional incumbents of centralised, closed systems are trying to cling will slip away, and will be transferred to those who build, contribute to or participate the open, decentralised financial systems taking shape. This is inevitable and it is already underway, and trying to fight against it is as futile as is the fight against the windmills – such momentum can no longer be stopped, nor would it make any sense at all to try to stop it.

The only way to succeed and to generate value is to seek and find solutions to the new challenges with the new tools made available, as someone will find the answers anyway, and those answers will shape the evolution of the global financial system of the future, so it is no small feat. What is clear, regardless of the exact characteristics of the eventual winners is, however, that the most powerful solution will no longer be anything closed or centralised, and it will be impossible to maintain any power in such closed, centralised loops, as they will eventually run out of air like balloons – the Internet would have never been as successful as it has become as a global medium, if it had remained a system confined for military purposes as it was originally conceived.

As is the case of the Darwinian evolution, all actors must either be capable of adapting to the changing circumstances and accept the new realities and take new shape, or become extinct. This is what seems to be eventually happening to banks, central banks and the so-called fiat money as we know them – cryptocurrencies and the blockchain-based infrastructure will render many of their core functions ultimately obsolete. The evolutionary train cannot be stopped, but one must jump onboard instead. One cannot win the future through prohibition of products of innovation or imposing ever more regulation, as one can only regulate something that previously exists; this battle can only be won through ever smarter innovation, being better at it than anyone else, and applying it in better and simpler ways.

Like the blockchain itself, or the internet in general, the flow of information and transactions always finds its path to the right destination through replaceable nodes that become ever more numerous and interconnected so that any node can be immediately replaced by many other nodes without compromising the functioning of the network at all despite of any external effort to destabilise it, without any central server or institution behind it that could be attacked – the blockchain train cannot be attacked, as it will always find a way around any obstacles. This architecture of the open global financial system literally brings the power to the hands of its users and takes it from those of governments and institutions.

But rather than rejecting it, any government or institution can become stronger by adopting these technological advances to the benefit of their ‘clients’, be it the people of a sovereign country or clients of a business. While it is always very difficult to cannibalize one’s own power, often it is vital for survival and success, as history itself has proven so many times.

Here are also a few thoughts relating to money, central banking and the cryptocurrencies taking over sovereign currencies: https://bitcointalk.org/index.php?topic=4524280



We still can't see it for now since crypto currencies still needs to improve and needs to upgrade. We are still on the early stage and would wait for a proper time to decide that.

⚫ ▬▬     V T O S   |   Decentralized CDN & Social Network     ▬▬ ⚫
  Whitepaper    JOIN OUR ICO  >  MAY 28th  <
FACEBOOK               MEDIUM               TWITTER               GITHUB               TELEGRAM
tepakpak
Newbie
*
Offline Offline

Activity: 252
Merit: 0


View Profile
June 24, 2018, 05:33:00 PM
 #4

One thing we can be certain of is bitcoin should theoretically be more stable than the US dollar or any fiat due to its printing being algorithmically limited.
I totally agree with your opinion on this. Crypto function now can not be said good because it is not stable from the price when compared with fiat money. to be good must be completely stabilized first.
Now in the development stage, we wait what next.
hacker1001101001
Full Member
***
Offline Offline

Activity: 336
Merit: 119



View Profile
June 24, 2018, 06:24:20 PM
 #5

I think that crypto has the potential to replace the world currencies. But crypto needs to undergo some changes like it needs to adapt fast transactions without a large number of conformations and it also needs to decrease the transfer fee as much as it can as fiat currency does not have any transfer fees. Still, bitcoin and other cryptos are used as a mode of payment in many places around the world.

Findingnemo
Member
**
Offline Offline

Activity: 308
Merit: 13


View Profile
June 24, 2018, 06:55:46 PM
 #6

I think that crypto has the potential to replace the world currencies. But crypto needs to undergo some changes like it needs to adapt fast transactions without a large number of conformations and it also needs to decrease the transfer fee as much as it can as fiat currency does not have any transfer fees. Still, bitcoin and other cryptos are used as a mode of payment in many places around the world.


I think to be honest the value of bitcoin will not be able to fetch the value of normal country currency because it is not acceptable by any government it is widely accepted by the people in all over the world but also that uses on different minded people they will not understand what will the future of cryptocurrencies and then they will not predictable with the future of cryptocurrency.

audaciousbeing
Hero Member
*****
Offline Offline

Activity: 742
Merit: 551

★ ChipMixer | Bitcoin mixing service ★


View Profile
June 24, 2018, 06:58:31 PM
 #7

I'll go out on a limb and contend a double standard exists which contributes towards crypto currencies acclaimed volatility in contrast to the exaggerated stability of fiat money. There are no fundamental nor intrinsic reasons why fiat should inherently be considered less volatile or deemed more stable. Examples of this are the current venezuelan bolivar and zimbabwe dollars of ages past. Fiat currencies have displayed far greater negative price volatility than bitcoin has in its history.

One thing we can be certain of is bitcoin should theoretically be more stable than the US dollar or any fiat due to its printing being algorithmically limited. The impossibility of bitcoin and some alts being printed out of thin air without limit should make them less volatile and more stable however there are contributing factors and unknowns which prevent that from happening. Someday perhaps when bitcoin is a more established and known phemonea, it may be recognized as exhibiting greater stability than fiat for reasons mentioned above. Crypto currencies are in their infancy and markets have a ways to go before they reach maturity.

I totally agree with you on your submission in the first paragraph. I have equally maintained that the reason why fiat is said to be relatively stable is because of the intervention of government in the market as they have the ability to create more money from thin air. To really know the weakness in fiat is to remove government intervention even the most stable currency in the world won't last three months without causing distortion to the economy of the country. Just like what happen in an African country sometimes ago without the intervention of government in the foreign exchange market, the local currency rate of depreciation was more that yearly inflation.

However, its not all bad for government intervention but the grouse I have is now judging fiat to be better than crypto currency due to stability factor which is clearly a misrepresentation because if the two are allowed to operate without intervention, crypto will exhibit more stability than fiat.

Panda Trump
Sr. Member
****
Offline Offline

Activity: 490
Merit: 254



View Profile WWW
June 24, 2018, 07:23:23 PM
 #8

I think that crypto has the potential to replace the world currencies. But crypto needs to undergo some changes like it needs to adapt fast transactions without a large number of conformations and it also needs to decrease the transfer fee as much as it can as fiat currency does not have any transfer fees. Still, bitcoin and other cryptos are used as a mode of payment in many places around the world.

There are many cryptocurrencies which currently allow transactions to be processed within a couple seconds, almost free.
Take Steem as an example. Its transactions cost nothing and are instantaneous.

I still agree with you though, on the fact that crypto has the potential to replace the world currencies, but that it has to undergo some changes first.
These changes, however, would include regulation, decreased volatility and more acceptance by merchants around the globe.


|


      █████████████▅▄
     ██████████████▅▄
                  ██▆
                   ███
                   ███
                   ███
                   ███
                   ███
                   ███
                   ███
                   ███
                  ███
 ██████████████████▀
██████████████████▀



 ███████████
█████████████




█████████████
█████████████




█████████████
 ███████████



   ▆████████████████
 ▆▆████████████████
███▀
███
███
███▄
 ▀▀███████████████▆▄
  ▀███████████████▅▄
                 ▀███
                  ███
                  ███
                ▄████
 █████████████████▀▀
 █████████████████▀



███
███
███
███
███
███
███
███
███
███
███
███
███
███



   ▆███████████
 ▆▆███████████
███▀
███
███
███
███
███
███
███
███
███▄
 ▀▀█████████████
  ▀█████████████



   ▆████████████▆
 ▆▆█████████████▆▆
███▀             ▀███
███               ███
███               ███
███               ███
███               ███
███               ███
███               ███
███               ███
███               ███
███▄             ▄███
 ▀▀███████████████▀▀
  ▀███████████████▀
|
Dimon8
Newbie
*
Offline Offline

Activity: 238
Merit: 0


View Profile WWW
June 24, 2018, 09:27:38 PM
 #9

Now it is difficult to say whether the function of crypto currency is doing well, because they do not yet have mass use. I think that in the near future we will all use crypto-currencies, and this will create comfort.
mrcash02
Hero Member
*****
Offline Offline

Activity: 994
Merit: 524

★YoBit.Net★ 350+ Coins Exchange & Dice


View Profile
June 24, 2018, 09:46:54 PM
 #10

You have many truthful points on your article. I also think there isn't any way to stop Crypto-Currency anymore. The institutions will have to adapt themselves to it to continue existing. The centralized economies can't continue abusing the citizens anymore in the name of the poorest ones, the bankers, the elite's friends or who else is taking advantage from the average citizen's efforts.

But between the 3 money's functions listed, I think the only one Bitcoin doesn't fulfill at this moment is the Store of Value. Means of Payment is Ok, even for the currently conditions. It can be used as a mean of payment normally, the volatility can be avoided by exchanging the transacted coins to fiat after the negotiation.

stimliall
Newbie
*
Offline Offline

Activity: 126
Merit: 0


View Profile
June 24, 2018, 10:49:52 PM
 #11

The cryptocurrency and legal currency have much in common! The cryptocurrency itself is a currency!
It is currently not recognized by the government. The government currently defines cryptocurrency as an asset!
palle11
Full Member
***
Offline Offline

Activity: 392
Merit: 107



View Profile
June 24, 2018, 11:03:31 PM
 #12

Some jurisdiction refer to bitcoin as an asset which they later convert to money at their different times. These asset they hold in wallet or keep in exchanges in expectations of a great growth.

danceinthedunes
Newbie
*
Offline Offline

Activity: 98
Merit: 0


View Profile
June 24, 2018, 11:10:31 PM
 #13

Given its recent problems (volatility) there are doubts as to whether Bitcoin and its contemporaries can become fully-fledged currencies.

It is unlikely that the credit card faces an imminent threat to its dominant position in online payments.

However, even if Bitcoin itself does not become the internet of money, its technology could provide the platform for future online payments systems.

One possibility is that these might be developed through the major banks, and JP Morgan has recently filed a patent for an online payments system with Bitcoin characteristics.

But with the development and adoption of all internet-based technologies, we can only wait and see whether it takes off or not.
GoldenLad
Member
**
Offline Offline

Activity: 224
Merit: 12


View Profile
June 24, 2018, 11:10:48 PM
 #14

Cryptocurrency can always serve as an alternate to the local currency if the people whom are using it agree to transact with it as a form of payments. Its funny to say that even in the countries where the prohibition of cryptocurrencies, most cryptocurrency lovers are still using it to perform personal payments so far there is an agreement between the two parties.
ladydark
Hero Member
*****
Offline Offline

Activity: 672
Merit: 500


View Profile
June 24, 2018, 11:42:13 PM
 #15

Crypto currencies could not function as money due to their decentralized nature and limited supply and also being able to work only online.

magneto
Hero Member
*****
Offline Offline

Activity: 756
Merit: 568


View Profile
June 25, 2018, 08:47:09 PM
 #16

I'd actually say that bitcoin fulfill the function of money better than all fiat currencies in this world.

The reason is that I believe anything, to be considered money, must be a stable store of value in the long run. Fiat currencies have never retained its value, mostly because of the fact that there is a central institution that has control over its supply.

Bitcoin on the other hand is decentralised, just like gold. But it's much better than gold in the aspect of convenience and ease of transactions, which people certainly don't give enough credit to it for. Bitcoin is also much more fungible than fiat, since 1 btc is guaranteed to be equal to the next due to the anonymity. Banks may flag certain accounts, leading to the dollars stored in these accounts not be able to be sent to other accounts (we've seen this with at least one bank denying bitcoin exchange withdrawals)

no0dlepunk
Sr. Member
****
Offline Offline

Activity: 476
Merit: 258

I AM CASHLESS!!!!


View Profile
June 27, 2018, 02:42:37 PM
 #17

The content is too long to read here, it should have been pasted as link only. Anyway, as for now we cannot concretely say that cryptos are solely functional as money, but as soon as merchants start taking it, the rest will become history.

███████████████████████▄▄▄
████████████████████████████▄▄
███████████████████████████████▄
████████ ▀█▀▀▀███████████████████
██████ ▀█▄     ▀████▌    █████████
███████▄      ▄██▀▀█▌    ██████████
███████     ▄██▀   █▌    ██████████
███████    ▐█▀     █▌    ██████████
███████    ▐█     ▐██    ██████████
███████    ██▌         ▄ ▀█████████
███████             ▄▄ ▀█▄████████
███████████████████████▄█████████
███████████████████████████████▀
████████████████████████████▀▀
███████████████████████▀▀▀
Digiwage
▬▬▬▬▬▬▬   ANN  Whitepaper  Twitter  Discord  Reddit   ▬▬▬▬▬▬▬
Decentralized Freelance Workplace










███████████████████████▄▄▄
████████████████████████████▄▄
███████████████████████████████▄
████████ ▀█▀▀▀███████████████████
██████ ▀█▄     ▀████▌    █████████
███████▄      ▄██▀▀█▌    ██████████
███████     ▄██▀   █▌    ██████████
███████    ▐█▀     █▌    ██████████
███████    ▐█     ▐██    ██████████
███████    ██▌         ▄ ▀█████████
███████             ▄▄ ▀█▄████████
███████████████████████▄█████████
███████████████████████████████▀
████████████████████████████▀▀
███████████████████████▀▀▀
Join our
Workplace










timerland
Hero Member
*****
Offline Offline

Activity: 896
Merit: 536


View Profile
June 27, 2018, 09:58:21 PM
 #18

I disagree on the fact that you say bitcoin's volatility makes it not a good store of value.

It is still a good store of value in the long run in my opinion because of the fact that it is decentralized and its supply cannot exceed 21 million as we all know. Of course, there are short term fluctuations, but that doesn't really make bitcoin any less of a store of value in the long term. Gold and silver can also fluctuate in the short term as well, but they hold their value way better than fiats do.

And bitcoin is pretty much just a more convenient and fair system than gold/silver, with better divisibility and fungibility (you don't need to verify the purity).

Is BTC perfect as a form of money? No. But it sure does fulfill the basic functions of money imo with its tech.

Walter789
Newbie
*
Offline Offline

Activity: 210
Merit: 0


View Profile
June 27, 2018, 10:37:06 PM
 #19

I think a years later Cryptocurrency can fully perform its function to our society through empowering and upgrading with a higher posible to serves in our world. Cryptocurrency will used over all as a mode of payment and transactions after several successful different projects that helps all people and give them a good life.
BitcoinMarketer39
Full Member
***
Offline Offline

Activity: 378
Merit: 100


When Football meets Crypto


View Profile
June 28, 2018, 01:18:00 AM
 #20

I think that crypto has the potential to replace the world currencies. But crypto needs to undergo some changes like it needs to adapt fast transactions without a large number of conformations and it also needs to decrease the transfer fee as much as it can as fiat currency does not have any transfer fees. Still, bitcoin and other cryptos are used as a mode of payment in many places around the world.

Yes it has a potential to replace fiat in the future but as of now, the main use of cryptocurrency is for online transactions because there are a lot of online stores today who are accepting cryptocurrency payment method.

Pages: [1] 2 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!