[Part 1] QUALITATIVE COMPARISON OF FIAT VS MODERN MONEY ERA (CryptoCurrency)
Photo Credit: Artem Bali
QUALITATIVE COMPARISON OF FIAT VS MODERN MONEY ERA (CryptoCurrency)
Cryptocurrencies’ market capitalisation of around $500 billion is still small compared to the $1 trillion bourses dealt by each of the major 19 stock exchanges. The speculations of price fluctuations further erode their base. Even though cryptos haven’t yet tapped even 1% of the 40% unbanked population of the world, it’s currently using more power than the per annum electricity consumption of some third world countries. The carbon footprint of a single crypto transaction is nearly same as 0.5 million VISA transactions.
Although privacy and decentralization are some major benefits of cryptos, the fiat currency scores over them in mass appeal and ease of understanding. Cryptos, being the new disruptor of traditional methods, are bound to face initial slacks due to lack of knowledge and monopolistic interests of administration and crony capitalists. Currently, the overheads involved in making a cryptocurrency stable amounts to around 15% of total invested value. This offsets its advantageous proposition over fiat currency.
The 1st generation cryptos face a major disadvantage on their ‘performance’ front. The 1st generation of Cryptos can afford a mere 10-20 transactions per second compared to the traditional fiat based credit card companies (Visa, Mastercard etc..) that capable of 1000 to 2000 transactions per second. This situation could be changed soon, as a Blockchain company called "Kowala" expected to launch a highly innovative, Next Generation Blockchain platform that will offer, stability, privacy benefits, Decentralization and energy efficiency. During the testnet, Kowala presented a noticeable performance increase comparing the current Blockchain generation, 1 second per block, which means, a potential speed of 4000 transactions per second. By no doubts, this is an important news for the future of Crypto's implementation within the Enterprise industry.
Ethereum’s smart contracts are a step towards improving blockchain and cryptocurrencies’ practicality and mass appeal. The smart contracts can be used for anything ranging from land ownership, accounting and legal aspects to settling ownership and insurance claims.
Additionally, the ICOs are a major converter of ‘crowd-funding’ into ‘crowd-selling’ and are expected to bring stock market’s equivalent crypto-market to peoples’ phones. Here too, blockchain technology would greatly help in bridging the economic facilities affordable to the rich and poor because the jargons and complexities levied by 21st century's hypothetical ‘free trade’ has led to overall increase in everyone’s incomes but the difference between the rich and poor stands exactly where it was in earlier times (even more).
[SIDE NOTE: Cryptocurrencies can also be used to wire out remittances to one’s native homeland without having to face exchange rate volatility and transaction fees.]
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Disclaimer: The written article is for a general knowledge and entertainment only. This is not a financial advice or any other professional advice of any kind. Anything you may choose to do or not to do based on the written above is at your very own responsibility .