Are we witnessing the end of fiat money?

Cryptocurrencies and their future role in the world economy

The current crisis does not seem to be taking its toll on cryptocurrencies, at least for now. While other sectors of the economy have suffered a severe setback and even the strongest fiduciary currencies in the world are facing a high inflationary process -the temptation or need to print money with which to finance an urgent increase in public spending is already a reality- The main cryptocurrencies are at a good time at the time of writing this article, with prices similar to what they were before the pandemic got out of control in southern Europe.

Could this crisis be the turning point that would mark the definitive takeoff of cryptocurrencies as a widespread means of payment? Today talk about that and some other things. Keep reading. 

 

Consolidated investment value 

Although the embryonic idea that gave rise to the birth of bitcoin -the first and most successful of the cryptocurrencies- was precisely that it function as a decentralized means of payment, without a central authority, which in this case would be replaced by the trust of its users and the Blockchain network acting as the ultimate authenticator, we all know that, despite the fact that the idea was attractive, the most common use for now is to use crypto assets to invest, not to use our ethereums, bitcoins etc., to pay for purchases or services.

There is an important exception, and that is that XRP, Ripple's cryptocurrency, is often used as a means of payment, or at least as an instrument to reduce cross-border payment commissions, where before one would have to pay onerous fees to convert one fiat currency into another. now XRP is presented as an ingenious and innovative way to make sending money remittances between countries cheaper.

Of course we can also buy the Ripple currency to speculate, save or use its price to trade online thanks to the services of a broker, but the practical utility of XRP as real money is undeniable and it is only fair to highlight it.

Debit cards to pay with cryptocurrencies

Thanks to the fact that cryptocurrencies usually have subdivisions of themselves, which would act like coins of one, ten or fifty cents in other currencies - the smallest unit in which bitcoin can be divided is a satoshi, which would be one hundred millionth part of a bitcoin-, we can make day-to-day payments with cards that already allow us to use our cryptocurrencies.

If we are a little attentive and have cryptocurrencies among our investment assets, we can pay for services or products with bitcoins when they rise and thus save.

For example, if we bought bitcoins in the March crash at just under $5,000 and paid for something today with them, we would have saved some good money, since these days it is around $10,000. Of course, comparatively there are not many consumers who use such a valuable asset to make day-to-day purchases, and it is not surprising.

Speculate on the price of cryptocurrencies without selling our assets

If we have bought any cryptocurrency before the bitcoin halving of last May, the recent rises may have tempted us to sell them and take a profit. We will not be the ones to tell you what to do with your investments, but if you want to keep the cryptocurrencies you have already bought safe on the one hand, and still speculate on the price of crypto assets in general, there is CFD trading with cryptocurrencies. .

In this type of investment we do not own the cryptocurrencies, and therefore we can operate without touching our portfolio of assets, we try to take advantage of the rises to operate long and the falls to operate short.

If, for example, we believe that the price of bitcoin is going to rise and we want to take advantage of it without getting rid of ours to collect the surplus value, we will open long operations, if we believe that it is going to go down, we will operate short.

It must be said that investing in cryptocurrencies through CFD trading is not a panacea for easily earning capital, far from it, in fact most traders lose more than they earn, and all online trading platforms warn about this. , in addition to the risks of large losses or debts that may be incurred. What it does allow is the ability to always operate, since it allows you to open potentially winning positions -also potentially losing ones- in any situation.

In addition, in recent years some brokers have developed tools that allow us to minimize risks, such as negative balance protection, which will prevent our accounts from ending in negative, that is, with debts. If we are interested in the trading option, it will be very important to do some field work first; both the broker that we are going to use and our needs and trader profile that we are, as well as the market and operation in which we plan to enter.