It is becoming increasingly obvious that people are moving away from cash. You may have some in your pocket right now, but when was the last time you used cash, particularly when making a large purchase? The answer is probably no, as numerous surveys conducted around the world have shown, and there are various options trying to replace the king.
Inasmuch as cash is becoming less ubiquitous, the graph above shows that we’re still using fiat currency. Credit/debit cards and wire transfers are still traditional financial systems, while mobile payment apps often use APIs to connect to a user’s bank account. Only cryptocurrencies, which use blockchain technology, can be independent from fiat currency and their adoption is on the rise.
Almost everyone has heard of cryptocurrencies by now, with a rare few making up the exception. If you’re among the latter group, it may be a good idea to stick your head out of the sand, because this is one of those marches of progress you can’t ignore any longer. The only question worth answering right now is which payment method you should prefer over the other.
To help you answer that is, here are some of the considerations you may want to take into account.
What Does Security Mean to You?
Everyone wants to keep their money safe, but the concept of security could have a varying meaning to different people. For me, it’s the idea that my money is completely safe unless through an odd-defying circumstance.
Anyone like me would likely prefer cryptocurrencies because the blockchain is 100% secure whereas even some of the most sophisticated banking systems have been exploited. This is very common through account hacking, credit card theft, identity theft, etc.
And although there are ways to recover lost funds, why go through the ordeal when you can simply avoid becoming a victim through cryptocurrencies. By taking reasonable precautions like choosing the right crypto wallet, using secure passwords, and avoiding shady websites, you’re pretty much guaranteed that your money is completely safe.
On the other hand, many others believe that security is granted by institutions like the banks and governments. As we’ve already mentioned, banks can follow up on fraudulent transactions and reverse them while governments insure bank deposits (remember Silicon Valley bank).In this sense, it’s also arguable that traditional fiat currencies too are very secure when you take precautions.
The difference, though, is where the security lies; because cryptocurrencies give you ultimate control of the reins of security while fiat currencies leave the state in charge and you at their mercy. Therefore, how you choose to define security is a good start to choosing which payment method you think would be better for you.
Convenience and Ease of Use
The world’s economy has been built around fiat currency and has been so for the past few centuries. Sure you may have swapped an odd item for another with your buddy, but that doesn’t happen anywhere else. As such, cash is the reigning king because it is acceptable everywhere and, well… makes the world go ‘round.
We can’t deny that fiat currency is extremely convenient to use, whether that’s in the form of cash or otherwise. Meanwhile, only a handful of outlets will accept payments in cryptocurrency, and even then it may not be the cryptocurrency you have. Only the top cryptos like Bitcoin, Ethereum have become more mainstream, locking out other crypto holders from the economy.
Some crypto wallet providers and exchanges have started issuing debit cards to bridge this gap, but that could also be argued to be a form of fiat currency. And despite great efforts to make crypto platforms and usage simpler, it still takes a bit more effort to perform the same tasks.
Frankly, it will take years for cryptos to reach fiat’s global acceptability, making it less convenient for everyday use. So, if being able to spend leisurely is a priority for you, then you should stick to fiat currency… in the meantime.
Control Over Your Finances
Cryptocurrencies are notoriously volatile, especially altcoins whose value can change very quickly from one day to the next. For most people this is unacceptable and is one of the reasons many businesses don’t accept crypto payments.
This is completely understandable because everyone prefers to have a sense of stability and predictability, which is what fiat currencies promise. Besides, cryptocurrencies come and go all the time including some that initially showed a lot of promise and/or support.
But just with the question of security, this control over your fiat holdings is also not complete. In the worst cases, we’ve seen hyperinflation erase the value of fiat currency, and even in the best cases, the value of fiat currency hasn’t kept up with inflation - essentially losing real value.
Cryptocurrencies, however, while mostly volatile and unpredictable, allow you to make the decision(s) by yourself. For instance, you can choose one crypto over another for whatever reason or own multiple cryptos simultaneously.
Furthermore, cryptos can be used for more than just transactions but also as an investment. An entire ecosystem exists parallel to the traditional banking system, one that could allow you to have a direct hand over your finances as long as you’re willing to adapt.
Privacy
Recent revelations about how tech companies use our data have caused debate over what we consider about privacy. It is considered a fundamental human right and one we can all agree with since no one likes to be watched or, worse, monitored. Yet it seems we’re usually okay with it going by how little outcry is coming from the public.
It’s either because we find the trade of privacy worth visiting our favourite websites, or we’re unaware how extensive the breach of privacy really is. No one who truly values their privacy is oblivious of how their personal data can be used, and will typically prefer cryptocurrencies, which shouldn’t be assumed to be a sign of guilt or wrongdoing.
The world becomes a lot wider the more private you are about your data. It may sound counterintuitive at first, but it is true because you become more difficult to fit into a particular category. This is what happens otherwise when you start to see similar recommendations on streaming sites, social media platforms, and navigation apps.
Thanks for reading and have a wonderful day.