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Can Cryptocurrencies Become Real Currencies? by@chrisdouthit

Can Cryptocurrencies Become Real Currencies?

Chris Douthit HackerNoon profile picture

Chris Douthit


The amount of positive news coming out this year involving cryptocurrency is encouraging because it is signaling that people, and institutions, see the blockchain for what it will become: The next step in the evolution of technology that will eventually impact every facet of human endeavor.

Recently, big-name insurers like AIG announced that they are now producing policies “tailored” to protect businesses that operate within the crypto space. Blockchain startups now have options for buying insurance, and if the insurance industry will calculate the risk involved in these types of ventures, then it means that the needle on the legitimacy scale is moving upward.

Another positive step for blockchain technology is the fact that over 100 mainstream media outlets have come together in Hong Kong. Their only purpose is to promote the blockchain, and they intend to get the public involved with this emerging technology by providing only high-quality information aimed at keeping them informed and combat the misinformation negativity being pushed by some governmental and private sectors.

World-renowned economist Doug Casey said, “the prime directive of all living things is to survive,” and that is certainly the case with cryptocurrency and blockchain technology as it struggles to break out of its current status on the world stage and become legitimate in the eyes of the public. There are now some Samsung stores that will take cryptocurrency payments, and that’s a good thing if you’re one of those who would eventually like to see the full out acceptance of crypto as a payment method throughout the world.

Casey, who likened blockchain technology to the invention of the automobile, recently stating that when cars came out people didn’t need to be drivers or own one right away to understand that this technology would change the world. He also believes that blockchain technology is the biggest thing to hit the world stage since the internet itself.

Bitcoin and all its derivatives are trying to become a viable currency as it struggles forward to meet all the “rules” set down by none other than Aristotle in the 4th century who said money needs to be durable, divisible, convenient, consistent, and have innate value to be considered “good.” Aristotle also said money is anything generally accepted as payment for goods and services, and that the primary uses of money are for exchange, a unit of account, and a store of value. So, will cryptocurrency ever meet this standard?

Cryptocurrencies still need some work to meet these prerequisites for becoming a viable long-term currency. However, once it irons out some of its current issues, the technology behind it will vault cryptocurrency into the mainstream, and the possibility of these coins becoming the first world currency will explode.

The durability of money, meaning just how survivable it would be if something happened worldwide (or even locally) to turn it upside down like a war or destabilization of government, should be the most important quality of any viable currency.

Considering it exists only in cyberspace one has to ask what the possibilities are for a worldwide disaster (such as a magnetic pulse from the sun) that could wipe out the networks that house this currency. Remote as the possibility may seem, there is the chance it could happen. So, is this true durability?

Divisibility isn’t a problem as it can be said cryptocurrencies are easily separated and recombined in cyberspace meeting that rule with no problem. It is also portable, sort of, but access problems and the inability to easily change cryptocurrency into fiat currency that can be spent on the ground makes it difficult to meet demand; however, blockchain technology is advancing rapidly, and soon this problem should become non-existent. This also ties in with the convenience factor, and so far cryptocurrencies are not very convenient to use, but again, that is all changing and soon the issues causing problems in this area will be a thing of the past.

Cryptocurrencies have no problem with consistency as each coin is just like every other coin, but what about inherent value? As a transfer tool, it has tremendous value and has been dubbed by Casey as a “private” fiat currency differing only because it isn’t backed by any government and its value is only controlled by market conditions.

All currencies have half-lives where their viability peaks, and then as circumstances affecting those currencies dictate, they lose their viability over time. Currencies in Africa might have a half-life of 5 to 10 years while the British pound’s half-life might be much longer due to factors both within and without government control. In each case, both predictable and unforeseen circumstances dictate the time those currencies will be viable, and the issuing authority will destroy most at some point. So, what is the half-life of a cryptocurrency? Right now no one can truly answer that question, nor predict the implications for not knowing.

The US dollar has lost about 96% of its value since the creation of the Federal Reserve in 1913, and if that trend continues or speeds up, rich countries like the US and other countries connected to the value of the dollar could find themselves in serious trouble. However; if one has their wealth parked in a system that isn’t controlled by those circumstances that make or break traditional currencies like the dollar, those people might easily ride out the storm while any apocalyptic financial crisis happens in their home country.

Casey, who has predicted some of the worst financial disasters in recent history (well before they passed mind you) believes that there is a new disaster hanging over our heads at this very moment. Could it be that cryptocurrencies might find its place when this thing happens?

While this news could be is disturbing, it could also give cryptocurrency the push it needs to become a world currency as people learn the value of having a decentralized monetary system that isn’t connected to any world government and is easily transferable across borders without regulators being able to capture or destroy any of your wealth.

So, what does it all mean? Maybe that people should no longer hold on so tight to the previous way of doing thing, as early adapters will see a windfall of wealth. Currently less than 1% of the world owns cryptocurrenices, so it is still very early. Preparing for these changes now will help one survive the volatility found on the world stage. If you choose a strategy to create and preserve your wealth with this in mind, you might just come out far better off on the other side.

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