Digital Currencies: The Future of Money
Before the time money was invented the “barter system” was the only method of establishing trade, in which the buyer and seller used to exchange goods against another commodity. This method remained in the picture for centuries. Later a new approach was adopted in which an intermediate medium called ‘money’ was invented which simplified the trading process to many folds.
In the present scenario, this money, which is usually a paper currency or coins, is finding its digital form, which is called digital currency. In this article, we will be focusing on this new form of money, its future aspects, and the challenges involved.
What is digital currency?
Digital currency is a digital asset which acts as a medium of exchange. These currencies are decentralized in nature which means there is no Central server to control the transaction process; thereby it becomes easy for the buyer and the seller to transact their funds at minimal processing fees across any national boundary. The digital currency transactions are more secure and fast in comparison to the traditional currencies.
Why Digital currencies over traditional currencies?
There are a large number of advantages associated with the digital currencies, which are as stated below:-
One of the prominent features associated with the digital currencies is its decentralized nature that means there is no need for any intermediate party to accomplish trade between the buyer and seller.
For example, person A wants to sell his 10 Bitcoins, and at the same time a person B is looking for a seller to buy 10 Bitcoins, in this case, there will be no need of a third person C to accomplish the transaction between person A and person B.
Inflation proof
The biggest problem associated with the traditional currencies is the period of inflation, in which it struggles to become stable in the market. But in the case of digital currency, this situation never occurs because of the controlled trading volume
No production cost
The traditional currencies are printed over a piece of paper, and the coins are minted; thereby, the manufacturing cost is more. However, in the case of digital currencies, no such costs are involved.
Enhanced security
Digital currencies rely on the blockchain technology, thereby it is impossible for hackers to crack the ledger and interrupt in between the transaction taking place so this form of money is more secure.
Future aspects of digital currencies
Looking over the popularity of the digital currencies among the mass audience, we can say that this form of money will very soon replace the traditional currencies. Here are the key points emphasizing over how the market will look like when this form of money completely replaces the traditional currency.
Attracting more people
Millions of people are showing interest in this form of money; thereby, they are participating in digital currency trading over the digital exchanges and earning huge profits. Therefore, this form of money will very soon become a stable household currency and globally acceptable.
Upgrade transactions in industries
Soon we will be able to see more businesses accepting the digital form of money for their day-to-day transactions, more specifically the e-commerce market will adapt to this mode of transaction which will make it more attractive and appealing among the shoppers.
Smooth government policies
Government officials now realize the importance of digital currencies; thereby, countries like Switzerland which is replacing the traditional form of money with the digital form and opening new doors for this form of money. Also, the countries where adapting to digital currencies is still a big problem needs to introduce better trading regulations.
Summary
The complete replacement of the traditional currencies with the digital currencies will take a few more years but still not the decades. Therefore, there is a big possibility that this form of digital money will impact more areas like finance, trading, and businesses within a short period.
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