I want to make a comparison between the stock market and what is happening with currency. In the early 1600s, when you bought a stock you were given a stock certificate. These were used to show proof that you owned shares in a company. It was also a form of status, and unaffordable by the average person. In order to make a trade, the physical certificate was handed over to the buyer at an arranged price. Stock trading was all done manually until the 1970s, with the introduction of electronic trading platforms. These were still off limits to traders and were accessed only by brokers. Often times, the price was not updated for several hours so it was unknown what the actual price of the shares were until all orders had been settled. Eventually innovations came along and developed the trading systems we know today. I didn't want to go into a lot of the history so my apologies for making it short.
When this conversion was initially happening, I'm sure many shareholders were apprehensive to give up their stock certificate. I myself would have many concerns and worries. What guarantees that the shares owned would be recorded correctly and what type of security was in place? Where would trades happen and during what times? Quickly it was seen that digital trading was much more efficient, saved money and allowed trades to happen instantly. Looking at it now there is no way that traders would agree to go back to a paper trading system.
Now, where am I going with all of this?
The conversion of stock certificates to digital shares is what the world is seeing right now in cryptocurrencies. We initially got used to going cash-less with the introduction of credit cards but allowing people to spend money up front proved troublesome.
With the volatility of cryptocurrencies like bitcoin, it's not safe to use for "savings". The solution to this, a class of cryptocurrencies, deemed "stablecoins" which are pegged to the USD and are always worth $1 USD. Putting $1000 in USDT for example, will always be worth $1000 (plus or minus a few cents). Now, this can act as a savings account or be used for purchasing goods and services.
Benefits
1. Fast transactions
2. Cheap transactions
I recently tried to transfer money using ACH, from my bank to an exchange. The transaction took 7 days to complete and while free, result in me missing out on opportunities to trade. Stablecoins on the other hand are sent within minutes, sometimes seconds all for less than a cent (Using TRC20 or BEP2 networks). There is convenience behind these transactions.
The market is still really new and most people are hesitant. I believe that the in the near future we are going to go entirely cash-less.
Please let me know what your opinions are on this and where you see things going in the future. We can all learn a lot from each other.
**This is not financial advice. Cryptocurrencies, even stablecoins come with risks and should not be ignored anytime your money is involved. Before making any decisions do your research. Please make smart decisions
**This article is cross-posted by myself on leofinance