The technology space has been at the center of the strong rallies in crypto markets that have been seen over the last few years, and it is quickly becoming clear that there is a clash between the digital world and the traditional monetary system.
Crypto alternatives are making names for themselves (despite the best efforts of some of the world’s best-known bankers). Thus far, we have seen relatively little in terms of the regulatory pressures that were initially expected, although there have been some exceptions. Most of the government resistance to crypto currencies has been in Asia, with significant digital currency limitations put in place in both China and South Korea. The real question here is whether or not this type of reluctance to accept crypto instruments will become more widespread.
One plank of the argument that says ‘no’ can be found in the common failures that a cash society produces. These inefficiencies cost real money, and the snowballing effect ultimately means that printing and using money actually costs us collectively a lot more in real terms. This has already prompted countries like China to move away from using the US Dollar.
In this chart, we can see that the cost to mint new US coins in the amount of $0.01 has sharply increased since 2006. Rising values in what a US penny costs to produce inevitably lead to increased losses that are encountered for every penny that is in the system. This says nothing of the pennies that are lost, stolen, or damaged through regular use. When we think of a world in which cryptocurrencies and digital assets are rising as a primary means of transaction, we can also imagine scenarios where many of these inefficiencies are made obsolete.
In fact, we are already seeing these events take place at the official government levels. Recent political moves in Canada have already started to eliminate parts of the national currency system with the removal of their own $0.01 coin from circulation. But the realities here should make the problems even more obvious, as customers at both small businesses and large businesses are forced to round up or round down whenever using physical cash for their transactions.Finance Facts
This is unlikely to continue, and it suggests that entrepreneurs in all sectors will be gaining exposure to the cryptocurrency assets as one of their essential business performance improvement strategies. The fact that Canadian consumers have already expressed clear dissatisfaction with the inconsistencies between physical and digital transactions goes even further to suggest that there is a real need for digital alternatives to forex trading in the current market climate.
For many, the reluctance to start investing in these areas stems from the fact that very little is known about blockchain markets and these instruments. This, of course, has been true for most of the major advancements in technology and there is essentially no reason to believe that this time would be any different. This Eximchain ICO review explains some of the ways peer-to-peer cryptocurrency platform can pair newer investors and businesses with more experienced experts within the industry. This can help to avoid many of the mistakes that are commonly made in digital assets.
From a security standpoint, there appears to be more room for argument when coming from both sides of the equation. Some will argue that having physical currency will actually make consumers less prone to theft and monetary victimization. This is largely because consumers will generally need to use artificial intelligence and heightened security procedures in order to protect the integrity of a digital wallet.
Last, it is important to consider the value standpoint and take a look at the differences between what it costs to mint and print physical currencies versus what they are actually worth in circulation. In the chart above, it is clear that there are differences based on the inherent value that is assigned to a coin.
In other words, the actual value of a $0.25 quarter is far greater (in percentage terms) than what it costs to mint the coin. But since this is not the case for the coins at the lower end of the value spectrum, it ultimately suggests that cryptocurrencies have a greater value when used for transactions of a smaller size.
There are inevitabilities here that must not be overlooked by tech entrepreneurs and digital business owners, as they suggest that there is almost no amount of government regulations that can adequately satisfy these needs in the marketplace of the future. Those needs are even further exacerbated when those businesses conduct transactions across borders.
The blockchain is real, and the initial reluctance in many governments and at many banks will not be able to do much to change that. This is mostly because there are real underlying economics that support the need for these types of instruments, and all tech businesses will need to adapt to the continuation that is coming in the next few years.