All things good things come to end, or so they say. We live in a world that is constantly evolving and changing. Adversely, our human minds tend to function best when they’re in their comfort zones. Because of this, we often have trouble adapting to and accepting change. And, it is no different when it comes to the world of finances.
New Forms of Currency
Money is the perfect example to help explain this evolution. The shape, form and name of money has continually changed and progressed over time. There were even times when we used to use animals, hides, pearls, shells, spices and gold as currency.
There are, of course, a few key characteristics that define money such as its divisibility, durability, usability, rarity and portability. These defining traits are what determine if and how it will be adopted into society over the course of time.
However, despite this constant progression, many of us still to believe that our present form of money, fiat currency, is going to be around forever. But, the truth is that fiat currency has only stood on its own, not backed by gold, for 46 years and only in recent years has money begun to be largely digitized.
Slowly, cryptocurrency is becoming the next evolution of fiat currency. Still, many will argue that its volatility on the markets is a sign of its non-viability over time. But, maybe, this volatility is an critical part of any financial transition.
A Necessary Evil
Over history, money has always been extremely volatile during two stages of its life: birth, and death.
We have been well acquainted with how volatile a currency can become when it dies or its market crashes for one reason or another. Two very recent examples of this are the Venezuelan Bolivar and the Zimbabwean Dollar.
The birth of new, independent currencies is just as hectic. This is especially true when it comes to cryptocurrencies, because there are no benchmarks from our history to compare them with. Because of this, we have no choice except to be content with a dynamic market and its relative value in relation to investor speculation.
However, people often equate the value of cryptocurrencies to other forms of currency, such as the US dollar, that they want to yield from their investment. That said, opinions on cryptocurrencies and their future changes drastically depending on who you ask, which, in turn, results in unprecedented volatility on the market.
Also, remember that a new form of money always needs to prove itself as a store of value, before it can become a means of financial exchange. Why would we want to accept a new type of money for our goods and services if it has no real value?
Therefore, it becomes clear that volatility is a natural and unavoidable path for any new forms of currency.
The Path to a Global Currency
While the future will always be uncertain, the path to accepting and adopting any new form of currency is no small undertaking. But, there are currently a whole plethora of cryptocurrencies that could be used as a stepping stones towards a globally excepted form of money.
Over the course of history, we have established many different forms of unity. First, it was family unity, then tribal unity. Next, we established villages and cities, then empires and national unities. Logically, the next step will be global unity. In fact, most experts believe that a true global currency will never be possible without first establishing complete political unity.
The one question that we are all left asking ourselves: Could cryptocurrency pave the way to a globally accepted, world currency?