The traditional world of finance is going through strong transformations due to the expansion of new technologies. Since the emergence of the internet, innovations in the financial sector have been important. The use of trading algorithms, that is, automated operations of buying and selling financial assets without human intervention, already represent 70% of stock movements.
The traditional use of physical money is one of the elements where technology begins to modify the playing field, by the appearance of more electronic means of payment, such as electronic wallets, payments through cell phones and biopayment systems (in those that only require the fingerprint) that represent important advances on the already traditional debit or credit cards.
Interestingly, emerging economies and the most advanced are leading the transfer of physical money to electronic money. Norway is making great strides in its goal of eliminating physical money completely, while several countries on the African continent, such as Kenya, are paradigmatic cases in the implementation of electronic currency: 86% of the population already uses the cell phone to make payments and send money.
Of all these financial innovations, the one that aims to be more disruptive are the Cryptocurrencies.
None of the financial innovations seems to be as disruptive as cryptocurrencies
Cryptocurrencies, a new money
Physical money is not only being replaced by electronic money, but digital currencies called Cryptocurrencies are gaining prominence.
These are born out of private initiatives, have no country of origin, are exchanged online anywhere in the world and can be converted into currency or any national currency through several companies that provide this service in the world.
The crypto-money is born as a result of private initiatives, they do not have a country of origin, they are exchanged online and can be transformed into traditional money
riptofiebre, uncertain value and bubble profile
The value of the most important cryptocurrencies, such as Ethereum and Bitcoin, have no support or are derived from other currencies or assets, it is difficult to determine
The most important cryptocurrencies, such as Ethereum and Bitcoin, which have no support or are derived from other currencies or assets, are a new type of money whose value is difficult to determine. They are different from merchandise money because they have no intrinsic value such as gold, silver or other goods that were used as money in the past. In particular, they are a new type of fiduciary money, whose value is based on faith1 such as the dollar, the euro, renminbi, pesos, bolivars, etc. whose price is not due to the fact that the money contains value in itself (or that it has an endorsement in some asset such as the gold that backed the dollar or the dollar that backed the Argentine convertible peso). Fiduciary money has value because someone will accept it as a means of payment somewhere in the world. What increases the willingness to accept fiduciary money, that is, its value, is usually the regulation of the central banks that obliges it to be accepted within a territory and to which the State accepts it as a means of payment to collect taxes and services. Also, the crypto-money has value because it is accepted as a means of payment, and is accepted as a means of payment because there are markets to transform this new money into the traditional money that we usually use as euros, dollars, pesos, etc.
Cryptocurrencies have greatly increased their value since they were launched. This growth is explained by several reasons of demand and supply. On the demand side, these currencies are required by attributes that are appreciated by users of cryptocurrencies, such as security, low transaction costs and, especially, anonymity, since cryptocurrencies allow transfers without revealing the identity . This anonymity allows the holders of cryptocurrencies to be kept far from the control orbit of the State and is one of the attributes that most exploits cryptocurrencies in their promotional campaigns. Bitcoin is pseudoanonymous, because it has given information to the courts in cases of laundering or others. Crypto-moneymaker Z-Cash, for example, boasts of using an encryption technology called "zero-knowledge" that allows it to guarantee total privacy of information.