What is money?
Money is a system that allows us to buy, sell and transact with one another. The exact definition is “a medium to facilitate exchange.”
Money, the medium of exchange, comes in many forms, including coins, banknotes, digital money, cheques, and now cryptocurrency.
We all have a choice when it comes to accepting something in exchange. For example, you reach the point of payment in a store and notice different offers from companies encouraging you to use their form of payment. HSBC Credit Card cashback on any purchase over X amount, Citi Bank Debit Card cashback when you spend X amount, discounts if paid using banknotes, etc…. the offers and promotions are endless. Having these choices are essential because It makes the market competitive, stable, and advance further.
Mediums of transactions — Credit Cards, Debit Cards, Bank Notes, Coins and Crypto
Generally, the best products will become adopted as long as they meet the needs of the market and offer a solution that can work, with low entry barriers and reasonable cost for everyone.
In our current system, 1.7 billion people globally do not have access to banking, financial institutions, and money providers.
Global Currency and methods of payment
We use multiple currencies globally, accessed through third party companies, offering different services at different rates. We can find the same offer, service, or product online or in-store at different prices. Depending on where you live, or where you travel, the transaction method you generally use, is very likely to be more expensive or completely useless.
I can use any one of my credit cards or cash to get what I need. But it can be very costly and isn’t usable globally.
Why is it that I can’t send money to family or friends across the world quickly?
Why is it so expensive? I thought newer technology would make it cheaper, or at least faster….
In traditional banking, three business days to send money cross border is not out of the ordinary. Nor is paying 5–10% charges on a transaction. But surely, this can’t be the best option we have.
We always push the boundaries of technology such as the internet speed. What was amazingly fast a few years ago, is unacceptable now. Each year we aim for better technological innovation. Isn’t it time traditional currency got an update as well?
The Modern Money called Cryptocurrency
Cryptocurrency has features that fit what good money should be;
Fast Transactions, Usable Globally, Low cost
Costs are cheap for all payment transactions
Computers run the system through programming (this means there is no chance of a tired employee forgetting to complete a last piece of work, or going home early leading to a delay in account processing or theft)
The system of cryptocurrency works 24/7 365 days a year , without rest, lockdown or sick days.
Cryptocurrency can be sent from one side of the world to another in 15 seconds — 5 minutes using Ethereum (This can be slower, but it depends on network availability, the type of cryptocurrencies such as BTC/ETH, and priority).
When we go abroad, for holiday or work, charges and conversion rates are sky-high (7–15% charges using airport currency convertors). We also need to tell someone that we are going away, or they might reject the transaction for security reasons. We don’t actually control the money in our banks. The Banks do.
It’s not a great reality to think that savings and day to day money requires permission and approval to use.
Banks take advantage of the current system
For example, using an ATM. Locally in Hong Kong, 4GBP, 40 HKD, 4 USD, 1000 YEN can be the standard charges for a standard money withdrawal. This is an advanced city with state of the art technology in place. But general citizens are paying to access their own money.
Small transaction fees only
It doesn’t matter where we are, Tokyo, London or Hong Kong, it will be the same all around the world. If cryptocurrency is accepted as the medium of exchange, there is no need for currency exchange (E.g. GBP to YEN), bank processing, or hidden and other fees.
If I have Ethereum, for example, the second most well-known cryptocurrency, charges can be as small as 0.001 USD per transaction (*prices can fluctuate). Ethereum is also not yet ready for global transactions, but the potential remains. This is exactly why Mastercard and Visa are investing in crypto companies to adopt the technology going forward.
Globally, users are not anywhere close to fully adopting Cryptocurrency and Blockchain, paying in cryptocurrency isn’t at the stage where we can happily travel, eat, shop, and pay in any store with any one of the 1000’s cryptocurrencies available.
Even if each City is growing in this adoption, and more people are accepting the payment methods, it’s still not close to being like a Mcdonald’s on every street corner. Payment options are just not there yet.
Both the current system and cryptocurrency systems have a long way to go, but considering cryptocurrency has better technology, better costs, and better usage potential, why would we continue to improve on the older model?
We moved on from dial-up internet speeds long ago. It’s about time money caught up as well.