“Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.” ~ Donald Trump (45th President of the United States)
Digital technology has sure taken quantum leaps this year and the best example that anyone can quote is the sudden popularity of Cryptocurrencies, or what we simply call ‘Digital Money’. But where there are legitimate advancements, there is also no dearth of falsities that have created only but bedlam in the world of technology. Just like it’s hard to trust most politicians, the internet has only but blown things to magnanimous proportions when it comes to Cryptocurrencies.
While internet rumors are common and most of them are often harmless, rumors about cryptocurrencies created a lot of unrest and has made the market even more volatile. Listed below are some of the most devastating rumors that have badly affected the digital currency market.
- Cryptocurrency Founder Killed in Car Crash – If you’re a new cryptocurrency enthusiast, then you’ve probably heard about how Ethereum, a counterpart of Bitcoin made an impactful entry in the market last year. However, the fake news of its founder killed in a car crash caused them a loss of $4 billion.
- Amazon to Accept Bitcoin – This news received a thumbs-up from people around the world as it increased the credibility of this cryptocurrency. Well! The bubble soon exploded into oblivion when there was no response from Amazon that could legitimize this news.
While these news pieces shouldn’t have been taken seriously in the first place, it is certainly hard to know the difference between real and fake on the Internet. But in the midst of all this craze about cryptocurrencies and them being hailed as the ‘Future of Money’, we often ignore the underlying shortcomings of digital currencies. Despite of digital money being seemingly more secure and convenient than your everyday dollar bills, it has myriads of loopholes that make it far more impractical as a legitimate standard of wealth or exchange.
Why Cryptocurrencies Cannot Replace Money?
- Questionable Tangibility
According to Forbes contributor, Jeffrey Dorfman “Bitcoin is An Asset, Not a Currency”. This line alone emphasizes the fact how hollow this platform is when it comes to tangible value. Money bills are usually issued by the central banking authority of a country backed by their respective governments. Cryptocurrency on other hand, has no central authority that ensures its value. Therefore, it can never work as a currency with worldwide acceptance in trade and business.
- Value as a Standard of Wealth
Unlike your regular Dollar bills, the value of cryptocurrencies depends solely on the number of users. Moreover, if a particular digital currency is only used among groups or individuals with bad reputation, it can never be accepted in white collar businesses and international trade for natural resources.
Therefore, it must be clear to most readers that such a medium can never work as an efficient standard of wealth, let alone monetary acceptability on a large scale. But what if this highly dubious currency were to gain worldwide acceptance, what implications could it create?
If Cryptocurrencies Ever Replaced Money
Infrastructural Deconstruction – With traditional currencies losing value in face of Digital Currencies, it would become extremely difficult to trade with the lack of an underlying economic infrastructure. It would require a brand-new trade policy along with prices for each commodity, resource or service being traded against the new currency.
Economic Downfall – With no central authority or real-life resource backing its value, it would be difficult to determine its value for each country. Since regular currency value reflect a country’s economic and political stability, there is no gauge how Cryptocurrencies could be used for trading national resources. Thus, it could possibly send us back to the days of ‘Barter’ which is an extremely complex medium of exchange.
Extremely Slow Transactions – Even with several improvements in its underlying technology, trading with cryptocurrencies can be an extremely slow process that could take from days to weeks to process. Since the primary purpose of Cryptocurrencies is to maintain anonymity in transactions, it becomes even harder to regulate for government agencies.
Despite of all claims by Tech Moguls and the ever-floating rumors about Digital Money being the future, it is nothing but a delicate economic bubble that can burst anytime. While a lot of people could argue about paper money also being a sort of a promissory note, which itself holds no value. Nevertheless, till the time you can pay your bills and buy food with it, we hardly doubt anyone would question its legitimacy; something that no digital currency is currently capable of.