The sudden spike in the interest in digital currency found its impetus in US President Joe Biden’s initiative to delve deep into the digital currency world.
Digital currency started gaining wider recognition only after US digital currency started to be operated by the central bank, following which central banks of several other nations began implementing a similar policy. However, what exactly triggered such a revolutionary change in the financial structure?
The perpetual financial crisis seems to have led to a massive shift from traditional and digital payment methods. The constant financial crisis has led to a feeling of mass mistrust among the citizens, which has led them to resort to digital payment methods like Bitcoin, which is relatively difficult to regulate.
Bitcoin Changing Digital Payment
The current digital payment infrastructure is based on the idea of the conventional systems of finance providers and engaging in a kind of payment structure where there is no intervention from Central banks or any such intermediate sources.
It was introduced as more of a contemporary or alternative to the traditional methods of payment that has led to massive decentralization of the existing blockchain structure.
As a result, regulation and monitoring of cryptocurrencies like Bitcoin and Ethereum have become quite tricky. Initially, crypto wasn’t used as frequently and widely, so unregulated payment transactions were entirely off the radar. However, the rise of such unmonitored monetary activities has resulted in the rapid growth of more and more regulation authorities.
Bitcoin and its Implications
Numerous people have professed and predicted that Bitcoin is the ultimate future that is set to bring about revolutionary changes in the quality of life in the future. Bitcoin Magazine recently interviewed Michael Saylor, the CEO of MicroStrategy.
In that interview, Saylor points out how very often the concept of currency is automatically associated with money. He discusses the problems he would have to face if he dealt with traditional stocks – like not being able to transfer them in real-time, whenever we want.
He explains how currency is something that is fixed by the government and how a tax-free transaction like bitcoin is profitable. Digital Payment provides people the flexibility in an economic system that helps them to invest wisely in attaining a goal. Saylor believes systems like Bitcoin will flourish rapidly if it has the support of the Central System.
He states that building a Bitcoin Standard will increase the currency’s strength. Not only that, but it will also keep the current financial inflation caused by that currency at bay. This is a step toward understanding and trying to put monetary inflation to an end.
He states that strengthening the value of Bitcoin is the only way to tackle inflation, and rational states are bound to adopt Bitcoin.
While Saylor speaks highly of Bitcoin as the ultimate solution for a better future and prevention of financial inflation, it is met consistently by criticisms. The biggest problem that people in the vast traditional market have pointed out is its lack of law and order and the growing popularity of the same.
For instance, it has been pointed out that the lack of regulations and restrictions is not considered a harmful disadvantage of Bitcoin; instead, it is a notable feature.
Prices of Bitcoin and Ethereum keep falling a little further with every passing day, to the point that it was predicted that the value of Bitcoin would come down to three digits in US Dollar currency. If Bitcoin is going through such a rough patch, how can it provide financial stability amid inflation?
Bitcoin may be watered down to CBDC (Central Bank Digital Currency), which again will be transparent but has restrictions to a certain extent.
The untraceable nature of money is enough to influence evil ways of spending money and will not help nations maintain or restore financial stability.