Question

Please write down your thoughts after reading the paragraphs ie. agree or disagree and why? (Min 5 sentences 150 words + )

Our currencies and economic system as we know it today will not slowly dissolve in the emergence of “cryptocurrencies” and “bitcoins.” Our current currencies are so deeply embedded into our lives that it is unlikely for cryptocurrencies to replace money. There are specific values placed on the bills and coins, and established exchange rates that allow people from all over the world to use the existing currency wherever they want. On the other hand, cryptocurrencies are decentralized. As a result, they have different values, so it is harder to use this type of currency in different places and situations.

If cryptocurrencies and bitcoins became our primary source of currency, banks would no longer be needed. Paul Kemp-Robertson says in the TED talk, “...there was a Gallup survey out recently that said something like, in America, trust in banks is at an all-time low, it's something like 21 percent” (Kemp-Robertson, 2013) With such low trust in banks, the use of independent, branded currencies would essentially eliminate the need for banks. Because cryptocurrencies are decentralized, brands and companies could independently manage their own specific currency rather than rely on banks. Even though this video is a few years old, nothing significant has changed; our currencies and economic system is still prominent. Cryptocurrencies are not any closer to replacing our current currency.

Answer 1

I agree with the statement that cryptocurrencies are not any closer to replacing our current currency.

Money is a unit of account that allows consumers to compare the prices of different goods and services. It is a medium of exchange that allows buying and selling of goods an services. It is also a store of value that allows consumers to save to buy things in the future. Cryptocurrency only partially fit the definition of fiat money. They are also not backed by any commodity.

It is required that money is stable and its value does not fluctuate. Banks have provided confidence in fiat money over the years. Cryptocurrencies lack stability. The prices of cryptocurrency fluctuate wildly. When the demand for cryptocurrencies increases, the cost of cryptocurrency transactions increase drastically. Cryptocurrencies have a fixed total supply, its demand is uncertain and is subject to fluctuations due to specualtions.

Cryptocurrencies are vulnerable to fraud and debasement than money since they are managed by central banks. They lack security. Every now and then, we hear news of a major hack concerning a bitcoin exchange. Cryptocurrency transactions are not convenient too. It is in the sage of infancy and currently lacks direction.

I hope that was helpful :)