For many centuries we have left behind forms of money such as salt, metals or even stones. And it is that technological evolution has brought with it many new ways for people to have money to make our purchases and payments in general, some with certain advantages over others. In a globalized world where electronic commerce is increasingly present in daily habits, new forms of intangible money emerge: cryptocurrencies.
Bitcoin, a cryptocurrency born in 2009 and with its creator or creators still anonymous, has gone from being a supposed scam, to an investment, a means of payment, until it becomes something that is increasingly close to being a solution to the current economic model that It has been proven to be a fiasco.
Countries have gone from badmouthing cryptocurrencies to starting a career. As it happened in his day with the Moon, to see who creates a digital currency before. China and Russia are leading the way, France is already testing the concept with the digital euro and Spain has also started recently.
The battle of cryptocurrencies has just begun
Since 2009 many cryptocurrencies and tokens have appeared, some of them have been disappearing, others have been full-blown scams, but there are many that have achieved unprecedented capitalization. Now football teams, major renowned companies such as Alibaba, Amazon, PayPal or Facebook are creating their own or at least interested in creating one.
I am one of those who thinks that a greater variety, greater competition and therefore greater freedom and better for the consumer. Now it is time to see in this battle if the governments and main central banks take advantage of their position to create a kind of monopoly around the cryptocurrencies that they are going to create.
The consumer has to prepare for the new challenges that arise
We are going to go from using mostly fiat money to having a choice and that will bring with it new ways of using money. The million dollar question is: what is all this going to mean for the consumer?
In the first place the consumer is going to have to face new ways of losing their money and having it stolen. Before I had it on a bench or under the mattress and unless someone physically entered it was safe in quotes. On the other hand, the bank’s money is protected by the bank itself and the State, something that gives security to the people.
Second, the consumer will have to choose between the anonymity of using certain cryptocurrencies with what this entails is the possibility of losing money or having it stolen and not being able to claim anyone, or let it be regulated as before. .
What is clear is that sooner or later all anonymous cryptocurrencies will be controlled by the Government that what it wants is to collect its taxes. An example we have with Monero, a cryptocurrency that has a highly anonymous protocol and that recently the US has requested that a software powerful enough to break that anonymity be created.
Cryptocurrencies and revolution of the current financial system
For sure we cannot know what cryptocurrencies and blockchain technology will mean for the current financial fabric. We know that the speed of transactions has improved, that the involvement of smart contracts will reduce costs and speed up time in terms of their services. In short, higher productivity is an advantage in addition to lower cost that will supposedly be passed on to the customer.
Another huge advantage for the financial system is the number of potential clients entering the playing field. Since until the appearance of cryptocurrencies there was still a number of people in the world that, thanks to smartphones, did not have access to money. Even with decentralized finance (DeFi) to banking services that will allow them access to new possibilities and opportunities that they did not have before.
Are cryptocurrencies and the digital euro a threat?
Spain has always been a country that has based its economy on trade, a serious mistake. Since the 90s, where unemployment was plagued by draftsmen and construction workers, there was talk of tourism in places like Benidorm, Malaga, Marbella, Ibiza, etc.
Spain is still a country that does not bet on a different industry, full of university experts who had them (there has been a brain drain) and where innovation was based on the industry.
Once again, this time due to a speculative global crisis product of everyone’s greed, Spain again stumbled on the same stone, basing its economy on tourism and the construction of houses right on the coast.
While countries like China or Russia invested in technology, through reverse engineering and their intellectual capacity until we were amazed. Today they are two great powers that are going to bring the world upside down.
Once put in place, cryptocurrencies enter the playing field and with it the danger of inflation is worrying. It has been seen how in countries like Venezuela or Argentina they have been a small solution to the economy and that is good. A strong country must have a strong digital currency.
The existence of a digital euro like other cryptocurrencies supposes a much more precise form of control through technology. In this way, it will be possible to have more transparency and less theft. This is undoubtedly good news for citizens since the Government must have accounts that are as transparent as possible for better control.
What will happen then to all the money that is in tax havens? That’s a great question. It is logical that all that money is converted into cryptocurrencies due to the advantages that this brings but I do not know how to tell you how this transition will be made.
In short, the digital euro is a brave bet, adapted to what the current market demands, which has been crying out for it for some years, a bet to change the current economic model and a desperate attempt to solve the patch that governments they put the financial economy in 2008, due to the explosion of the housing bubble, a patch that has only served to alleviate the pain of a wound that continues to bleed today.