Cryptocurrency will be the norm of the Global Financial System?

Cryptocurrency will be the norm of the Global Financial System?

The detractors, however, stress that despite the promises by some that cryptocurrencies represent the actual future of the global economy. They will never be able to break out of their existence on the Internet. Numerous problems currently afflict the real-time exchange markets. Preventing cryptocurrencies from genuinely challenging the established ones. Furthermore, the recent COVID-19 demonstrated to us how erratic these currencies can be in the wake of a major world disaster. While Bitcoin has gradually rebounded since its March collapse, stock exchanges experienced. A one-day 26% decline in value, a catastrophe that most investors find intolerable.

Will the world of blockchain eventually pose a serious threat to the established financial markets? Is it possible to prevent the risk of centralization by emphasizing the adaptability of intelligent?? App-based technologies like Qtum and cryptocurrency-based ATMs?

ATMs for cryptocurrency & obstacles to banking

One essential component of our reality that impacts our quality of life is financial inclusion. For the purpose of handling unforeseen crises, absorbing financial shocks, growing their businesses, and making investments in housing, health care, and education, families and businesses must have fast, dependable access to reasonably priced financial services like credit and insurance

Globally, while about 69% of people own a bank account. This percentage becomes nearly one-third in developing countries. Where the majority of people do not have access to any banking services. Since many unbanked individuals usually have cell phones that can be used as digital wallets. It is evident that these digital payments are being increasingly used.

In 2020, the COVID-19 pandemic caused lockdowns of a kind that restricted individuals to shopping from home. And boosted the usage of digital transactions. People were compelled to make transactions inside of their homes due to widespread lockdowns caused on by theCOVID-19. Outbreak in 2020, which increased the use of digital payments even further is visible. Makes it drastically go up, especially in the sense that many unbanked people have mobile phones. Which can be used to store digital wallets.

The 2020 COVID-19 pandemic sparked a variety of lockdowns. Pushing people to purchase at home and thus digitally enhanced transactions amplified. Hence, even in the remotest areas of the world, the cryptocurrencies, in particular, are very powerful mechanisms of democratization. That can enhance inclusion and facilitate fast and rapid transactions however with no middlemen. For example, even in the world’s poorest areas, cryptocurrencies have the potential to be a very effective democratizing force. That can boost inclusion and enable quick transactions without the need for an intermediary.

Bitcoin ATMs & Cryptocurrency ATM

might be the solution required to address the issue of banking obstacles. To put it briefly, crypto ATMs function by enabling users to use their phones. To anonymously swap fiat currencies—that is. Money whose value is determined by a central authority—for cryptocurrency. The user merely needs to utilize a mobile app to scan a QR code. In order to transfer and receive any kind of digital money. This currency can then be converted into fiat and taken out using any cryptocurrency ATM. Eliminating the need to withdraw cash from a bank account or credit card.

Furthermore, as our futuristic society is beginning to resemble Futurama more and more every day. It will soon be possible to take cash from any location at any time. Since the ATM will physically fly to us. Recently, MANNA Robotics, a new firm based in San Francisco. Invented a drone delivery system that flies straight to users who have requested their services, providing instant cryptocurrency ATM service.

Reducing the “Tragedy of the Commons” & Using the (PoS)

Among the arguments advanced by those who think digital currencies have no future are their intrinsic limitations in terms of availability. The proof-of-work (PoW) model underpins the operation of conventional cryptocurrencies like Ethereum and Bitcoin. This method was first created as a safety precaution to discourage unwanted uses of computational power, such as spamming a network and denial of service assaults, but it was later used to stop people from “cheating” at cryptocurrency mining operations.

Since there is a limited amount of computing power available, fraudulent miners are discouraged from attacking the network. Because doing so would need far more resources than they could earn.

But these days, the PoW approach necessitates ever-increasing energy usage, translating into costly transaction costs. If a solution is not found for this issue, the system as a whole may eventually face a “tragedy of the commons,”. In which an excessive number of people will fight for the same resources (in this example, cryptocurrency).

Due to the low block reward for mining at that point, there will be a huge decrease in the number of miners. Financial institutions provide safe depositories for those people who keep and spend their wealth in the form of cash.

proof-of-stake( PoS) mechanism

One of the approaches used to solve that problem is the proof-of-stake( PoS) mechanism. This is achieved by methods, which directly relate the number of coins a person possesses to their mining capacity. A PoS system uses merely a stake in place of the computing power and energy needed for PoW. In the aforementioned scenario, the miner owning 51 percent of a cryptocurrency will never attack the network. Because doing so would be against his personal interests as the primary stakeholder. Therefore, it is reasonable to say that PoS-based cryptocurrencies are the blockchain’s future. Even though so far only few of them have been able to effectively implement this method.

Of these, Qtum—a smart contract platform that specializes in software for mobile development—appears to have the most promise. Qtum combined the Ethereum Virtual Machine (EVM) and the Bitcoin Core infrastructure, with its original goal being to serve as a bridge between the two platforms. It functions as a hybrid value transfer protocol with the adaptability to enable dapps and smart contracts, while retaining the security of the bitcoin secure blockchain.

Major flaw in Ethereum

Another major flaw in Ethereum that Qtum seeks to address is the requirement that the sequence start from within the blockchain. With “master contracts,” Qtum will enable contracts to be initiated by external triggers from outside the blockchain, providing it the flexibility to be far more in line with real-world scenarios. It appears as though Qtum has the potential to rival more established cryptocurrencies if its marketing strategy is effective and it can fulfill its promises.

While there are other proof-of-work (PoS) cryptocurrencies like Dash and Neo, none of them appear to be able to match Qtum in terms of becoming a viable alternative to fiat money.

That is, once more, presuming that cryptocurrencies can effectively replace fiat money. However, the general fear of a resource crisis can be dispelled at least by the broad use of PoS cryptos.

Large Companies Join the Cryptocurrency

Is the Dream of Decentralization Already Gone?

It was a matter of time until the biggest names in finance turned their attention to virtual currency. According to a Thomson Reuters study with over 400 partners, about 70% of the largest corporations, including REDI, Goldman Sachs, and Eikon, had already announced plans to begin trading cryptocurrencies by the end of 2018.

Their goal is to get a foothold in a little but crucial segment of the contemporary trading sector. Furthermore, the adoption of cryptocurrencies by a century-old bank carries significant symbolic significance, notwithstanding the apparent limitations of their investments.

World’s Central Banks & Cryptocurrency

The world’s central banks have the ability to wreck cryptocurrencies, as demonstrated by this initial set of warning signs. Should the biggest financial houses begin to release their own cryptocurrency, the entire concept of “decentralized” could turn into just another idealistic bubble that will eventually bust. The “empire strikes back” scenario will quickly bring an end to the decentralization utopia. especially since they still have zero trust in the system and it is obvious that their goal is to dominate it in order to gradually destroy it rather than improve it.

To put things in perspective, Goldman Sachs specifically advised against investing in cryptocurrencies in May 2020, citing their lack of utility in the event of a world war. He clarified, saying, “Since you need computers to function and be able to access the internet, cryptocurrencies lack the war hedge component that gold has.”

The processing power and hash rate required to mine bitcoins are currently only possessed by a small number of mining pools, to the extent that these few companies control nearly half of the market. Similar to how central banks suppressed the traditional bitcoin market, networks are centralizing the cryptocurrency market by granting miners greater influence.

Cryptocurrency & SEC

Alternatively, investors may be able to purchase bitcoin without the danger and volatility of real-time exchange markets. If the highly debated bitcoin (ETF) is approved by the(SEC). The bulk of individuals are effectively kept out of the blockchain market due to their difficulties with exchanges. Where high trading fees and inadequate security are the primary problems. Not to mention how much these marketplaces are hampered by onerous laws imposed by countries that still can’t move quickly enough to keep up with the demands of the digital age. Furthermore, traders must incur extra costs and downtime because the biggest cryptocurrency exchanges do not accept fiat money. Instead, they must first purchase BTC/ETH from a “gateway” exchange.

But once more, will the future of cryptocurrencies truly benefit from the adoption of the ETF, whose concept alone allowed the price of Bitcoin to soar in July? Or would it just force the digital currency into the hands of a tiny number of world-controlling institutions, centralizing them?

Conclusion

It is now quite difficult to anticipate what the long-term future of cryptocurrencies will hold. They still have a lot of promise, even though the idea of a society free from personal debt may have been a little unrealistic.

Even while some of the new solutions look promising and some of their inherent limitations may be addressed, the future of digital currencies also hinges on how the governments of the globe and the traditional financial sector respond to them.

Furthermore, although we might discuss technology endlessly here, this is most definitely not the place to discuss politics!