At the introduction of Bitcoin, many people doubted the validity of this currency. Pundits believed it was a scam in the offing, meant to defraud people of their earnings. The gradual growth of the currency saw it establish itself as a solid alternative to fiat currencies and in no time, mainstream media started acknowledging it as not only a safe medium of exchange, but also a good investment. This was soon followed by selected retail outlets, casinos and entertainment spots accepting the currency as a mode of payment. Bitcoin is undoubtedly the currency of the future, and some of the currency’s characteristics, coupled with macro-economic events, will impact your life at the moment and in days to come.
Unlike fiat currencies, Bitcoin is deflationary in nature. Developers of this crypto currency have ensured that the supply of this coin falls in four-year increments from the date of inception. This is known as “halving’. The fact that more people are opting for this currency as a mode of pay and store of value has seen the transactional volume go high. The currency developers on the other hand, have restricted production and subsequent release of this currency which has resulted in a corresponding increase in value. Macro-economic factors that usually necessitate over-production of money by various governments are in fact the main cause of fiat currency inflation and devaluation. As for Bitcoin, the store of value is constant and on the upsurge.
Zimbabwe, Greece, Cyprus and Venezuela are just some of the countries that have experienced major economic meltdowns. These incidences of fluctuation in currency value have emboldened the resolve of not only individuals, but also corporations and nations to adopt Bitcoin as a defacto currency. In recent years,
Mexico and Ecuador have held bilateral discussions on possible formulation of a similar crypto coin in order to mitigate risks that face traditional currencies.
China, a major world economy has already sort advice from Citibank and Deloitte on the implications of having a digital currency working alongside its centralized currency.
Japan has long approved this crypto currency as a mode of payment and an equivalent to the yen. All these developments point to a growing reality that digital currency will soon be globally accepted as a means of exchange, store of value, and a medium of payment. This means that the most returns will be made by those who invested early into this great invention. With this reality comes life changes and disruption of norms.
Various legislations governing world financial systems have a significant influence on crypto currency adoption. Fraud and money laundering has for long dogged many countries with no end in sight, due to the difficulty in monitoring paper trail. Soft bans initiated by various governments on their populations are indicative of what the future really holds for crypto coin. This digital currency has strict security measures that will bar fraud and other financial malpractices prevalent with traditional currency. The elimination of these vices, which are largely fueled by laundered funds, will have a positive impact on our society, and many individual lives will ultimately be changed as a result.
The volatility of the dollar is a major concern for many, including monetary bodies like the World Bank and IMF. It being the global standard measure for other world currencies, its volatility has far reaching implications across the globe. Over the years, the value of the dollar has continued to weaken largely due to increased supply. Conversely, the digital currency has gained considerable ground against the dollar making it a worthy choice for many. Its ability to preserve its value over long periods of time has countries like China advocating for it to be approved as the global reserve currency. Clearly, the future will be bright for those with huge digital currency reserves.
Digital currency is not influenced by economic and political factors as is the case with traditional currencies. Therefore, the depreciation of world currencies may result in value appreciation of Bitcoins and other crypto currencies. As a gambler, you should make a wise choice by investing early.
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