Would you be willing to receive your wages in cryptocurrencies? As the growth of cryptocurrencies is increasingly rampant, there are already companies which are offering this method of wages payment to their employees. Back then, it would have been impossible to think about receiving your wages in cryptocurrencies.
Companies that offer this method of paying wages provides the option to their employees whether they want to receive it in full or only a portion of their wages in cryptocurrencies. Despite this, one of the major disadvantages of cryptocurrencies is the fact that it is a highly speculative investment. Hence, the value can easily crash to zero at any time.
Although Bitcoin and its digital currency are increasing in popularity, this is not be reflected in proportion to their everyday use. When Bitcoin was initially created, it was created to cater to transactional purposes. However, people picked up cryptocurrencies as investment vehicle because it can provide high levels of return within a short time. The payment processors Stripe recently cut off ties with Bitcoin because it claims that the platform has a slow transaction time and there are high fees that are associated with Bitcoin transactions.
With the myriad of problems that Bitcoin is having, it is clear that Bitcoin and it cryptocurrency counterparts are not ready for their debut into the mainstream world. In fact, the infrastructure is nothing compared to established payment processors such as MasterCard or Paypal that can process thousands of transactions within a second. In comparison, Bitcoin can only process single to double-digit transactions per second.
However, it is clear that the generation ahead of us is leaning towards the growth of digital currencies because most of us will live a digital cash lifestyle. This is why blockchain has grown in popularity as it opens up the opportunity to create secure and efficient peer-to-peer transactions. Here are the possible things that could happen to cryptocurrency future.
What can we expect from cryptocurrencies in the future?
First and foremost, it could come from the Federal Reserve which is trying to issue their digital currency. In fact, many other companies such as Amazon, and Walmart are trying to explore the concept of creating these currencies to pay for their services. However, it is expected that the cryptocurrency that they create can only be used within their system. For instance, the coins can be used to pay for Amazon goods. This is a good proposition because more people are more willing to buy from these corporations which are giants in their respective industries.
In addition, this will surely inspire trust in cryptocurrencies. As these retail giants start to accept cryptocurrency into their system, the value of their currency can go above the current major cryptocurrencies because it already has a huge user base before the cryptocurrency adaption. This would be a breath of fresh air because we have not seen a cryptocurrency being used so widely for a method of transaction.
As a direct impact of the situation, it may threaten the sanctity of current monetary policy and the national currencies that we have. In fact, it is easy to see why people would prefer to use cryptocurrencies daily. People reduce the risk of theft by ensuring that their virtual assets are kept on the blockchain. The convenience level associated with virtual currency also makes it a highly preferred platform compared to real cash.
This is perhaps one of the reasons why many tech entrepreneurs and investors are turning to blockchain startups to invest in the technology. However, not everyone believes in the potential of cryptocurrency. For instance, JP Morgan’s CEO has been very vocal about how he believes that Bitcoin is a fraud. Warren Buffet also projected similar negative opinions about cryptocurrency.
In the future, commercial banks will still have to play an important role to consumers. As our lives are mainly governed by centralized currencies, it will continue to provide a stable form of value for our daily transactions. It will take some time before cryptocurrencies can completely take over the job of a centralized bank. In addition, governments also try their best to avoid cryptocurrencies taking over the national financial system because it is not a sustainable way to do daily transactions.
Central banks want to issue their cryptocurrency
Central banks are among the stakeholders who are interested in issuing their digital currency. In fact, there have been several banks that are looking into this possibility. It is believed that having a centralized digital currency can help to make monetary policy is more flexible and even allowing for negative interest rates. Moreover, it is simple to store these centralized currencies into a digital wallet. It is also traceable in the sense that any frauds done using the cryptocurrency can be tracked down to a particular individual or entity.
Bank of England has recently revealed that having a centralized cryptocurrency can help to boost the GDP by 3%. This mainly comes from reducing the cost transaction. However, the bank has to think twice before they want to adopt the centralized cryptocurrency because they will disrupt the source of capital that they have through the transaction fees.
Cryptocurrencies growth in a nation is highly dependent on a nation’s stance. There are different ways that cryptocurrency regulations can play out. Firstly, the government can take a blanket approach like China which completely banned the trading of cryptocurrencies. The government can also steal the spotlight from cryptocurrency by issuing their centralized cryptocurrencies.
Another big player for cryptocurrencies
Despite this, experts remain optimistic about the potential of cryptocurrency models if there were trusted bodies that were backing them up. For instance, Starbucks could be a potential company that adopts the usage of cryptocurrencies. As they have strong branding, this will inspire trust within the cryptocurrency that they release. Despite this, Starbucks has been reported not investing as much into the cryptocurrency future as of now.
Amazon as a key stakeholder in cryptocurrencies
Another corporation which has been reportedly taking an active interest in cryptocurrency as Amazon. It is believed that they will be accepting Bitcoin or any of its digital rivals as a method of payment. In addition, Amazon has also registered several domains which are related to cryptocurrencies. Therefore, is no wonder why people believe that Amazon is going to announce entering the cryptocurrency space soon.
Let’s assume that Amazon will want to reward their customers in the form of cryptocurrencies. One potential situation is that customers will hoard these coins instead of using it to redeem a reward. The effects on sales and profits may go the other way than what was intended. Moreover, if a digital currency were to gain wide acceptance from retailers, the issuer will have to act like a central bank. In this regard, Amazon presents itself as a good body to potentially become the central bank. If this was to happen, can people count on Amazon?
Wrapping it up
Central bankers seem to be feeling agitated with the presence of cryptocurrencies. With the value of the dollar declining, more people are losing their faith in the dollar. As a result, more people are turning to investments such as cryptocurrencies. To think of it from another perspective, competition to central banks could help central banks remain on their toes and prevent any runaway inflation.