Money has been with us for hundreds of years and is still going strong as nothing moves without money.
However, before paper money became popular, metal was the first form of money, which dates to over 5000 BC.
A currency known as a punch marked Karshapana was made in the lower Ganges region in eastern India sometime around 600 BC, as per the Reserve Bank of India (RBI) website.
The beginning of Indian coinage, according to Hardaker, T.R., can be dated to 575 BCE and P.L. Gupta suggests that they first appeared in the seventh century BCE, between 1000 and 500 BCE.
During the same period, it has been recorded by the Greek poet Xenophanes who cited the historian Herodotus that during the 600 BC, a metal coin called Lydian stater was minted as legal tender by King Alyattes of Lydia.
But paper money was first launched in Chain in the year 960 AD, where it was issued and became very popular.
Since then, now all the nations across the world have their own currency or use other paper currency as their legal tender.
As all currency is state or in central banks control, it can be manipulated, and economies can crash.
After the launch of Bitcoin in 2009 by anonymous developer, Satoshi Nakamoto, people got an alternative to Fiat and other traditional financial instruments.
There were many challenges in paper money, as it can lose its value, fake paper money, unlimited supply, whereas crypto is decentralized, not faked and with limited supply.
Many of the crypto projects that have been launched are solving major problems in the world today.
Let’s take an example of Bitcoin, which was launched as a peer-to-peer payment system, where User A can send Bitcoin to User B without any third party verification instantly.
Today, trillions of dollars are moved across the globe and billions are spent only on remitting their money by using SWIFT, which is a global payment gateway, but this takes around three to one month to complete a payment cycle.
To solve this problem, BTC was seen as a game changer idea, not only that there are other crypto projects like Ripple (XRP), Stellar Lumen (XLM) and others doing the same work.
Using crypto, cross border payments can be made instantly and the transactions can be verified by anyone without the involvement of a third party. This reduces commission losses by billions of dollars.
These are still exceedingly early days, as banks across the world are resisting crypto for mass adoption, citing illicit money charges, which is not 100% true.
Like cross-border payment systems, there are many use cases that are driving the crypto sector.
With the market capitalization of close to $1 trillion, the crypto market touched an all-time high of over $290 trillion in November 2021.
As more people are driving towards crypto, in the coming decade, the adoption of crypto will increase exponentially.
Crypto adoption to touch 1 billion by 2022 end
Of the 8 billion global population, today only 300 million are holding some cryptocurrency, which is increasing, as more and more companies and institutional investors are buying it.
According to a report titled ‘Crypto Market Sizing Report 2021 and 2022 Forecast’ by Crypto.com in 2021, the number of crypto users climbed by +178%, from 106 million in January to 295 million in December. By the end of 2022, we predict that there will be 1 billion crypto owners worldwide.
Of that 300 million, more than 83 million people as of July 2022 hold Bitcoin, the world’s no 1 cryptocurrency with over $383 billion market capitalization.
Cryptocurrency is already being utilized as money, albeit on a small scale, despite the obvious difficulties. PayPal, a payment processor, has updated its app with cryptocurrency features.
Bitcoin and Ethereum are among the currencies that PayPal users can utilize.
El Salvador became the first nation to recognize Bitcoin as legal tender earlier this year, giving cryptocurrency a boost. Malta is attempting to make use of cryptocurrency more commonplace.
The Rug Republic, a business that sells home furnishings, has added cryptocurrency as a payment method as well.
All these examples demonstrate how cryptocurrencies are slowly permeating regular transactions.
Deutsche Bank claims that the current monetary system is unstable and according to its ‘Imagine 2030’ report, as demand for anonymity and a more decentralized form of payment increases, digital money may someday take the place of cash.
Regulation of cryptocurrencies might be approaching soon. Cryptocurrencies may replace fiat money in a lawful way as regulatory obstacles are overcome. Many governments will battle tooth and nail to maintain control over the money supply. In the end, Libra and other stablecoins might offer a roadmap for broader acceptance with tighter regulatory control.
Death to plastic cards
Plastic cards may be the true victims of cryptocurrency rather than money. We have been gradually phasing away cash for many years. As cryptocurrency adoption grows cash, credit cards, and debit cards may continue to be rendered obsolete.
Consider how our society has evolved from using coins and paper money to using debit/credit cards and online transactions. Plastic cards are already obsolete due to the proliferation of mobile payments such as Unified Payment Interface (UPI), Paytm, PhonePe, Paypal, and others.
The main distinction between blockchain and plastic cards is that all payments and transfers are carried out with the user’s complete agreement. Blockchain has many advantages over plastic cards.
According to Deutsche Bank, plastic cards may become obsolete. It only seems logical to think that credit cards will become obsolete as the popularity of cryptocurrencies rises.
Cryptocurrency provides a special solution that makes fiat money obsolete. People can become their own bank and payment mechanism thanks to cryptocurrency.
Technical and regulatory issues are the main difficulties. User adoption will determine whether cryptocurrencies take the role of cash.
When crypto is fully operational and incorporated into our lives, the world will change and crypto will become the future of money.