Tech

Will cryptocurrency replace fiat currency?

Published

8 months ago

18 May, 2024

Will cryptocurrency replace fiat currency?

Can cryptocurrency replace Fiat?

Cryptocurrencies are treated as a store of value and as money by many people, but to replace fiat currency, they must surpass the use and acceptance of fiat in most geographic areas. Between 2020 and 2022, cryptocurrency adoption rates have increased globally. However, rates have since declined, except in some geographic areas.

Low-middle income (LMI) countries are where the use of cryptocurrencies is most likely to replace fiat; coincidentally, according to research, LMIs are where cryptocurrency adoption rates are still increasing. This is most likely because many people in these areas do not have access to financial services, or existing systems suffer from inefficiencies or corruption.

Here are some issues faced by cryptocurrencies and what the future might look like for fiat and cryptocurrencies.

Key points

Developed countries are less likely to adopt cryptocurrencies than existing fiat currencies.
Some people expect cryptocurrency to replace fiat money around the world, but others are skeptical.
Cryptocurrency addresses many problems faced by those living in low- and middle-income countries.
The most likely scenario is similar to the current one, in which the cryptocurrency remains convertible with fiat currencies while some countries ban it altogether.

Fiat Currency Problems That Cryptocurrencies Solve

Many agencies and regulators define money as anything that is a widely accepted medium of exchange, a store of value, and a unit of account. Fiat money, sometimes called real or physical money, has met all three requirements for over a millennium. However, progress has already begun to reduce the need for physical currency in most developed countries. Cryptocurrency removes many of the requirements of today’s financial systems. Here are some.

The need to trust

Our current systems require third parties to issue debit and credit cards or make electronic transfers. Governments, banks, businesses and people transfer funds by having a third party, usually a bank, change numbers on the equivalent of an electronic ledger. These third parties are necessary to ensure the validity of transactions, and the costs of maintaining these financial systems are high.

These third parties also result in you having to trust your money to someone else. This trust has been violated on many occasions and unethical practices by third parties have also contributed global financial crises.

Cryptocurrency reduces the need to involve another person to verify transactions and ensure their accuracy. Each party is credited or debited correctly because blockchain technology is automated consensus mechanisms verify transactions and store information unalterably.

Decentralization of control

One of the most significant problems that many believe cryptocurrencies solve is the control of financial services. Undoubtedly, many people have problems accessing necessary financial services, and many are denied access for discriminatory reasons, lack of collateral or failure to comply with other requirements established by lenders.

Some may not have services available in their jurisdictions. However, since even those considered “without banks” generally have access to the Internet, decentralized financial applications using cryptocurrencies can solve many of these problems.

Another issue that many debate is centralized control of the money supply. The argument is that central banks use the quantity of money in circulation to influence demand, which interferes with exchange rates and purchasing power. Central banks also control interest rates to try to increase or decrease spending, depending on the inflationary environment.

The belief is that if control is taken away from these central banks, the people will influence supply and demand, which will help the currency maintain a more stable value. Furthermore, it is believed that if money and financial services become peer-to-peer inflation it will be tempered automatically by people lending to each other.

What would happen if cryptocurrency replaced Fiat?

Cryptocurrencies, in their current form, transcend borders and regulations, which has both positive and negative effects. They are not controlled or influenced by central banks like fiat currencies. Use of central banks monetary policy tools to influence inflation and employment through interest rates and open market operations. Decentralization, one of the fundamental principles behind cryptocurrency, removes these tools.

Consumers may have no recourse or financial protections if cryptocurrency, in its current state, replaces fiat currency.

The effects of the complete replacement of the instruments used by central banks are still being studied and evaluated. The change could have significant negative impacts on economic and financial stability or usher in an era of complete global stability.

THE International Monetary Fund (IMF) recommends not adopting cryptocurrency as the main national currency in the current state due to price volatility. Furthermore, the organization believes that the risks of macrofinancial stability and lack of consumer protection should be addressed.

However, the IMF recognizes that adoption is more likely to occur more quickly in countries where cryptocurrency-related risks represent an improvement on the existing financial system. For example, many Ukrainians turned to cryptocurrency after fleeing the Russian invasion in 2022. Without cryptocurrency, many may not have had the money to survive.

It is also used by many in countries with severe money devaluation to preserve their savings, send and accept remittances, and conduct business.

What will the future of currency look like?

You can already exchange cryptocurrency for fiat through exchanges or exchanges with other cryptocurrency users. Cryptocurrency continues to gain popularity in areas that are obviously in need of change, and the use cases, popularity, understanding and acceptance of blockchain continues to grow. The more each is understood and used, the more value cryptocurrency could have as a medium of exchange.

As seen from the use, research and development of cryptocurrency, it is very likely that the use of cryptocurrency around the world will continue to grow.

If these trends continue, different currency scenarios could emerge. First, a society and economy could embrace cryptocurrency to the point of replacing the country’s fiat currency. His government would be forced to recognize it as such legal tender and fiat currency would cease to be used. This is unlikely to happen in most areas.

A second scenario could be a hybrid between digital assets and fiat currency. Governments could recognize both and be able to raise tax revenues and fund their own programs and militaries. Consumers and businesses could choose what they wanted. This seems like the most likely scenario and in many areas this is already the case.

Third, a company could reject cryptocurrency entirely and continue using established fiat currency. This scenario could happen, at least as far as cryptocurrency is concerned. However, pressures to address corruption and awareness of blockchain advances are driving societies towards financial systems where information cannot be altered or falsified. It is very likely that blockchain technology, rather than cryptocurrencies, will become part of existing monetary systems.

Finally, there may be a mix of governments around the world that completely ban the use of cryptocurrency, while others allow its existence and convertibility into fiat currency, similar to how it is used today.

Is cryptocurrency better than fiat currency?

The prices and value of fiat currency are generally more stable than cryptocurrency. Cryptocurrency is still new, so in the future it could prove to be as stable as fiat money. Each has its advantages and disadvantages, but the use of cryptocurrencies continues to grow.

Will cryptocurrency replace fiat money?

It is unlikely that cryptocurrency, in its current form, will replace fiat currency in developed countries. However, it is possible in financially distressed nations.

Can Cryptocurrencies Replace the US Dollar?

The US dollar is backed and guaranteed by the government, and there would have to be a significant reason for the change, such as a collapse of the system, a complete devaluation of the dollar, or a total refusal by the majority of the population to use the dollar anymore. .

The bottom line

It is unclear how cryptocurrencies will evolve or become, but it is clear that cryptocurrency can benefit people and economies around the world. What remains to be seen is the fate of fiat and cryptocurrency: both have proven to be useful mediums of exchange, units of account and stores of value.

The comments, opinions and analyzes expressed on Investopedia are for informational purposes only. Read ours warranty and exclusion of liability for more information. As of the date this article was written, the author owns BTC and XRP.

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Harvard Alumni, Tech Moguls, and Best-Selling Authors Drive Nearly $600 Million in Pre-Order Sales

Published

6 months ago

31 July, 2024

Digital Finance News Staff

Harvard Alumni, Tech Moguls, and Best-Selling Authors Drive Nearly $600 Million in Pre-Order Sales

BlockDAG Network’s history is one of innovation, perseverance, and a vision to push the boundaries of blockchain technology. With Harvard alumni, tech moguls, and best-selling authors at the helm, BlockDAG is rewriting the rules of the cryptocurrency game.

CEO Antony Turner, inspired by the successes and shortcomings of Bitcoin and Ethereum, says, “BlockDAG leverages existing technology to push the boundaries of speed, security, and decentralization.” This powerhouse team has led a staggering 1,600% price increase in 20 pre-sale rounds, raising over $63.9 million. The secret? Unparalleled expertise and a bold vision for the future of blockchain.

Let’s dive into BlockDAG’s success story and find out what the future holds for this cryptocurrency.

The Origin: Why BlockDAG Was Created

In a recent interview, BlockDAG CEO Antony Turner perfectly summed up why the market needs BlockDAG’s ongoing revolution. He said:

“The creation of BlockDAG was inspired by Bitcoin and Ethereum, their successes and their shortcomings.

If you look at almost any new technology, it is very rare that the first movers remain at the forefront forever. Later incumbents have a huge advantage in entering a market where the need has been established and the technology is no longer cutting edge.

BlockDAG has done just that: our innovation is incorporating existing technology to provide a better solution, allowing us to push the boundaries of speed, security, and decentralization.”

The Present: How Far Has BlockDAG Come?

BlockDAG’s presale is setting new benchmarks in the cryptocurrency investment landscape. With a stunning 1600% price increase over 20 presale lots, it has already raised over $63.9 million in capital, having sold over 12.43 billion BDAG coins.

This impressive performance underscores the overwhelming confidence of investors in BlockDAG’s vision and leadership. The presale attracted over 20,000 individual investors, with the BlockDAG community growing exponentially by the hour.

These monumental milestones have been achieved thanks to the unparalleled skills, experience and expertise of BlockDAG’s management team:

Antony Turner – Chief Executive Officer

Antony Turner, CEO of BlockDAG, has over 20 years of experience in the Fintech, EdTech, Travel and Crypto industries. He has held senior roles at SPIRIT Blockchain Capital and co-founded Axona-Analytics and SwissOne. Antony excels in financial modeling, business management and scaling growth companies, with expertise in trading, software, IoT, blockchain and cryptocurrency.

Director of Communications

Youssef Khaoulaj, CSO of BlockDAG, is a Smart Contract Auditor, Metaverse Expert, and Red Team Hacker. He ensures system security and disaster preparedness, and advises senior management on security issues.

advisory Committee

Steven Clarke-Martin, a technologist and consultant, excels in enterprise technology, startups, and blockchain, with a focus on DAOs and smart contracts. Maurice Herlihy, a Harvard and MIT graduate, is an award-winning computer scientist at Brown University, with experience in distributed computing and consulting roles, most notably at Algorand.

The Future: Becoming the Cryptocurrency with the Highest Market Cap in the World

Given its impressive track record and a team of geniuses working tirelessly behind the scenes, BlockDAG is quickly approaching the $600 million pre-sale milestone. This crypto powerhouse will soon enter the top 30 cryptocurrencies by market cap.

Currently trading at $0.017 per coin, BlockDAG is expected to hit $1 million in the coming months, with the potential to hit $30 per coin by 2030. Early investors have already enjoyed a 1600% ROI by batch 21, fueling a huge amount of excitement around BlockDAG’s presale. The platform is seeing significant whale buying, and demand is so high that batch 21 is almost sold out. The upcoming batch is expected to drive prices even higher.

Invest in BlockDAG Pre-Sale Now:

Pre-sale: https://purchase.blockdag.network

Website: https://blockdag.network

Telegram: https://t.me/blockDAGnetwork

Discord: Italian: https://discord.gg/Q7BxghMVyu

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How Karak’s Latest Tech Integration Could Make Data Breaches Obsolete

Published

6 months ago

31 July, 2024

Digital Finance News Staff

how-karaks-latest-tech-integration-could-make-data-breaches-obsolete

Space and Time uses zero-knowledge proofs to ensure secure and tamper-proof data processing for smart contracts and enterprises.
The integration facilitates faster development and deployment of Distributed Secure Services (DSS) on the Karak platform.

Karak, a platform known for its strong security capabilities, is enhancing its Distributed Secure Services (DSS) by integrating Space and Time as a zero-knowledge (ZK) coprocessor. This move is intended to strengthen trustless operations across its network, especially in slashing and rewards mechanisms.

Space and Time is a verifiable processing layer that uses zero-knowledge proofs to ensure that computations on decentralized data warehouses are secure and untampered with. This system enables smart contracts, large language models (LLMs), and enterprises to process data without integrity concerns.

The integration with Karak will enable the platform to use Proof of SQL, a new ZK-proof approach developed by Space and Time, to confirm that SQL query results are accurate and have not been tampered with.

One of the key features of this integration is the enhancement of DSS on Karak. DSS are decentralized services that use re-staked assets to secure the various operations they provide, from simple utilities to complex marketplaces. The addition of Space and Time technology enables faster development and deployment of these services, especially by simplifying slashing logic, which is critical to maintaining security and trust in decentralized networks.

Karak Chain

Additionally, Space and Time is developing its own DSS for blockchain data indexing. This service will allow community members to easily participate in the network by running indexing nodes. This is especially beneficial for applications that require high security and decentralization, such as decentralized data indexing.

The integration architecture follows a detailed and secure flow. When a Karak slashing contract needs to verify a SQL query, it calls the Space and Time relayer contract with the required SQL statement. This contract then emits an event with the query details, which is detected by operators in the Space and Time network.

These operators, responsible for indexing and monitoring DSS activities, validate the event and route the work to a verification operator who runs the query and generates the necessary ZK proof.

The result, along with a cryptographic commitment on the queried data, is sent to the relayer contract, which verifies and returns the data to the Karak cutter contract. This end-to-end process ensures that the data used in decision-making, such as determining penalties within the DSS, is accurate and reliable.

Karak’s mission is to provide universal security, but it also extends the capabilities of Space and Time to support multiple DSSs with their data indexing needs. As these technologies evolve, they are set to redefine the secure, decentralized computing landscape, making it more accessible and efficient for developers and enterprises alike. This integration represents a significant step towards a more secure and verifiable digital infrastructure in the blockchain space.

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Cryptocurrency Payments: Should CFOs Consider This Ferrari-Approved Trend?

Published

6 months ago

30 July, 2024

Digital Finance News Staff

Cryptocurrency Payments: Should CFOs Consider This Ferrari-Approved Trend?

Iconic Italian luxury carmaker Ferrari has announced the expansion of its cryptocurrency payment system to its European dealer network.

The move, which follows a successful launch in North America less than a year ago, raises a crucial question for CFOs across industries: Is it time to consider accepting cryptocurrency as a form of payment for your business?

Ferrari’s move isn’t an isolated one. It’s part of a broader trend of companies embracing digital assets. As of 2024, we’re seeing a growing number of companies, from tech giants to traditional retailers, accepting cryptocurrencies.

This change is determined by several factors:

Growing mainstream adoption of cryptocurrencies
Growing demand from tech-savvy and affluent consumers
Potential for faster and cheaper international transactions
Desire to project an innovative brand image

Ferrari’s approach is particularly noteworthy. They have partnered with BitPay, a leading cryptocurrency payment processor, to allow customers to purchase vehicles using Bitcoin, Ethereum, and USDC. This satisfies their tech-savvy and affluent customer base, many of whom have large digital asset holdings.

Navigating Opportunities and Challenges

Ferrari’s adoption of cryptocurrency payments illustrates several key opportunities for companies considering this move. First, it opens the door to new customer segments. By accepting cryptocurrency, Ferrari is targeting a younger, tech-savvy demographic—people who have embraced digital assets and see them as a legitimate form of value exchange. This strategy allows the company to connect with a new generation of affluent customers who may prefer to conduct high-value transactions in cryptocurrency.

Second, cryptocurrency adoption increases global reach. International payments, which can be complex and time-consuming with traditional methods, become significantly easier with cryptocurrency transactions. This can be especially beneficial for businesses that operate in multiple countries or deal with international customers, as it potentially reduces friction in cross-border transactions.

Third, accepting cryptocurrency positions a company as innovative and forward-thinking. In today’s fast-paced business environment, being seen as an early adopter of emerging technologies can significantly boost a brand’s image. Ferrari’s move sends a clear message that they are at the forefront of financial innovation, which can appeal to customers who value cutting-edge approaches.

Finally, there is the potential for cost savings. Traditional payment methods, especially for international transactions, often incur substantial fees. Cryptocurrency transactions, on the other hand, can offer lower transaction costs. For high-value purchases, such as luxury cars, these savings could be significant for both the business and the customer.

While the opportunities are enticing, accepting cryptocurrency payments also presents significant challenges that businesses must address. The most notable of these is volatility. Cryptocurrency values can fluctuate dramatically, sometimes within hours, posing potential risk to businesses that accept them as payment. Ferrari addressed this challenge by implementing a system that instantly converts cryptocurrency received into traditional fiat currencies, effectively mitigating the risk of value fluctuations.

Regulatory uncertainty is another major concern. The legal landscape surrounding cryptocurrencies is still evolving in many jurisdictions around the world. This lack of clear and consistent regulations can create compliance challenges for companies, especially those operating internationally. Companies must remain vigilant and adaptable as new laws and regulations emerge, which can be a resource-intensive process.

Implementation costs are also a significant obstacle. Integrating cryptocurrency payment systems often requires substantial investment in new technology infrastructure and extensive staff training. This can be especially challenging for small businesses or those with limited IT resources. The costs are not just financial; a significant investment of time is also required to ensure smooth implementation and operation.

Finally, security concerns loom large in the world of cryptocurrency transactions. While blockchain technology offers some security benefits, cryptocurrency transactions still require robust cybersecurity measures to protect against fraud, hacks, and other malicious activity. Businesses must invest in robust security protocols and stay up-to-date on the latest threats and protections, adding another layer of complexity and potential costs to accepting cryptocurrency payments.

Strategic Considerations for CFOs

If you’re thinking of following in Ferrari’s footsteps, here are the key factors to consider:

Risk Assessment: Carefully evaluate potential risks to your business, including financial, regulatory, and reputational risks.
Market Analysis: Evaluate whether your customer base is significantly interested in using cryptocurrencies for payments.
Technology Infrastructure: Determine the costs and complexities of implementing a cryptographic payment system that integrates with existing financial processes.
Regulatory Compliance: Ensure that cryptocurrency acceptance is in line with local regulations in all markets you operate in. Ferrari’s gradual rollout demonstrates the importance of this consideration.
Financial Impact: Analyze how accepting cryptocurrency could impact your cash flow, accounting practices, and financial reporting.
Partnership Evaluation: Consider partnering with established crypto payment processors to reduce risk and simplify implementation.
Employee Training: Plan comprehensive training to ensure your team is equipped to handle cryptocurrency transactions and answer customer questions.

While Ferrari’s adoption of cryptocurrency payments is exciting, it’s important to consider this trend carefully.

A CFO’s decision to adopt cryptocurrency as a means of payment should be based on a thorough analysis of your company’s specific needs, risk tolerance, and strategic goals. Cryptocurrency payments may not be right for every business, but for some, they could provide a competitive advantage in an increasingly digital marketplace.

Remember that the landscape is rapidly evolving. Stay informed about regulatory changes, technological advancements, and changing consumer preferences. Whether you decide to accelerate your crypto engines now or wait in the pit, keeping this payment option on your radar is critical to navigating the future of business transactions.

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Bitcoin Tumbles as Crypto Market Selloff Mirrors Tech Stocks’ Plunge

Published

6 months ago

30 July, 2024

Digital Finance News Staff

Bitcoin Tumbles as Crypto Market Sell-Off Mirrors Tech Stock Slide

The world’s largest cryptocurrency, Bitcoin (BTC), suffered a significant price decline on Wednesday, falling below $65,000. The decline coincides with a broader market sell-off that has hit technology stocks hard.

Cryptocurrency Liquidations Hit Hard

CoinGlass data reveals a surge in long liquidations in the cryptocurrency market over the past 24 hours. These liquidations, totaling $220.7 million, represent forced selling of positions that had bet on price increases. Bitcoin itself accounted for $14.8 million in long liquidations.

Ethereum leads the decline

Ethereal (ETH), the second-largest cryptocurrency, has seen a steeper decline than Bitcoin, falling nearly 8% to trade around $3,177. This decline mirrors Bitcoin’s price action, suggesting a broader market correction.

Cryptocurrency market crash mirrors tech sector crash

The cryptocurrency market decline appears to be linked to the significant losses seen in the U.S. stock market on Wednesday. Stock market listing The index, heavily weighted toward technology stocks, posted its sharpest decline since October 2022, falling 3.65%.

Analysts cite multiple factors

Several factors may have contributed to the cryptocurrency market crash:

Tech earnings are underwhelming: Earnings reports from tech giants like Alphabet are disappointing (Google(the parent company of), on Tuesday, triggered a sell-off in technology stocks with higher-than-expected capital expenditures that could have repercussions on the cryptocurrency market.
Changing Political Landscape: The potential impact of the upcoming US elections and changes in Washington’s policy stance towards cryptocurrencies could influence investor sentiment.
Ethereal ETF Hopes on the line: While bullish sentiment around a potential U.S. Ethereum ETF initially boosted the market, delays or rejections could dampen enthusiasm.

Analysts’ opinions differ

Despite the short-term losses, some analysts remain optimistic about Bitcoin’s long-term prospects. Singapore-based cryptocurrency trading firm QCP Capital believes Bitcoin could follow a similar trajectory to its post-ETF launch all-time high, with Ethereum potentially converging with its previous highs on sustained institutional interest.

Rich Dad Poor Dad Author’s Prediction

Robert Kiyosaki, author of the best-selling Rich Dad Poor Dad, predicts a potential surge in the price of Bitcoin if Donald Trump is re-elected as US president. He predicts a surge to $105,000 per coin by August 2025, fueled by a weaker dollar that is set to boost US exports.

BTC/USD Technical Outlook

Bitcoin price is currently trading below key support levels, including the $65,500 level and the 100 hourly moving average. A break below the $64,000 level could lead to further declines towards the $63,200 support zone. However, a recovery above the $65,500 level could trigger another increase in the coming sessions.

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