IS CRYPTO A LEGITIMATE CURRENCY?

WRITTEN BY HARVEY H

In my topic, “Is Crypto a legitimate currency ” I will be discussing the positives and negatives of Cryptocurrency (Crypto) in a hope to show the reader a brief introduction on what crypto is and how it works.

In terms of the positives, we will consider how you can generate and store online cash easily and efficiently as many crypto stems incorporate these functions. Also, we will look at how crypto currency can be used on luxury items, allowing you to carry a large quantity of money with the use of a devices adding to protection.

We will also look through the negatives of crypto, including irreversible transactions, illegal activity, harm to the environment and unsecure exchanges. Then I will look into other forms of payment that are more global e.g., banknotes and coins to hopefully give you an idea of the differences that occur with both currencies

After this, I will compare crypto currencies efficiency to physical money (cash) to portray the difference between the two hopefully coming out with a victor and, allowing me to showcase how the question was answered through statistics and general knowledge, leaving me with the final conclusion which will later be revealed.

Cryptocurrency negatives

There are many negatives that come with the use of crypto currency, this all starts with the unreliable price of cryptocurrency which can, skyrocket or drastically fall in value at any moment creating a risky asset which could be classified as gambling forcing many to reconsider investing into crypto

More so, negatives come from a lack of awareness, as not many starters are completely aware of the technology This lack of awareness induces a sense of risk for crypto investments among people, leading to potentially irreversible transactions which commonly occurs through processes like lack of awareness

Once a transaction has gone through it cannot be reversed or refunded proving why scammers love to lurk around the crypto community meaning any small faults that you make could lose you large amounts of money whereas cash reinforces protection behind transactions

On top of this, storage of your online crypto can come across as unreliable, because many educated crypto users would store their earnings in a virtual wallet however many don’t, instead they store theirs in either a custodial wallet meaning it is controlled by the company which could be risky or a hot wallet, meaning it could be accessible from the internet This leaves them very vulnerable to scammers who don’t hesitate to take advantage of these situations.

These circumstances fuel illegal activity, as criminals known as scammers leverage the feature of anonymity to drive their malicious activity It is impossible to trace the identity of the users making cryptocurrency transactions This allows criminals anonymously to provide financial aid to activities like buying drugs, funding terrorism, money laundering, use of the dark web, and much more

There are other small details that could be the cause of its inefficiency, with it not being legalised in every country, as only some have embraced the new technology, due to it still being in its emerging stage As well as this, its causes harm to the environment, as an energy extensive process called crypto mining is estimated to account for 0 2% of global electricity consumptions which is a concerning figure Finally, the on-going curious question ‘what can you purchase with crypto currencies?’ Many people think you can buy almost everything with crypto currencies, you can most certainly not, as over the years it has grown to widen its uses to more retailers it still has a number of brands holding out. With its main purchases being electronics, luxury items, including watches, diamonds and some cars (Tesla), many smaller retailers don’t want to take the risk of accepting Bitcoin as payment as the market could crash and they lose all their money essentially giving away a free item

Cash instead of crypto

However, a main contester of crypto currency is the traditional English pound, even though the new generation evolve around technology, the English pound will always stay an efficient currency and will continue to be used by millions This is due to many positive factors with minimal faults to its layout, allowing it to function an economy and satisfy a country

Some of the major positives include its ability to ensure you freedom and autonomy, you can use it without electronics, internet, or access to any equipment, showing flexibility, also it has a legal tender, meaning creditors, such as shops and restaurants can’t decline a payment of cash unless both customer and shop agree another form of payment

Cash transactions are fast as banknotes or coins settle a payment immediately.

You also have the ability to keep track of your expenses with cash as it prevents you from overspending because you can not go into dept with banknotes, which can keep many eager spenders away from shops and help them control their spending

Despite all these positives, there a few negatives that come with the use of cash, one being the weight of coins (and large numbers of notes) as you physically would not be able to carry large quantities of cash around with you and you will not have the storage to do so Similarly, the material of banknotes is cotton paper, which is a start to be more sustainable, but still contains a lot of paper due to the mass production of it creating major damage to the environment However, it is clearly shown that the pros flush out the cons due to the mass of success that came out of the pound creating a tough contester for successful crypto

Cash versus Crypto

In response to this on-going debate, I have seen a that the gap between positives and negatives is very close

However, throughout my research I have found out that crypto is a highly risky ‘ currency ’ forcing the negatives to marginally out way the positives, however you can clearly see the thought process gone into crypto platforms creating a wellfunctioning currency

Correspondingly, the margin between pros and cons with cash is quite tight, however the pros come out as the victor So, I will now compare the most widely used currency, the English pound to the most widely used crypto currency, Bitcoin

Firstly, cash has the disadvantage of depreciation in value whereas Bitcoin should always keep its value due to its amount being capped at a 21 million, allowing you in theory to hold your value without fear of inflation

The main argument about the purchase of goods of pounds versus Bitcoin is very different due to the longer standing currency pounds allowing you to purchase anything from shops and restaurants to luxury cars and houses whereas we have already seen how Bitcoin struggles to keep up with the extent of coins, only being able to purchase a minimal number of items. Nevertheless, the rate of crypto currency transactions sky rockets above cash due to the simple design of a click of a button completing transaction in seconds whereas cash takes time to transport and verify it to the owner slightly evening out the debate Even so, cash contains a set value allowing you to purchase and use stuff whenever you want, whereas Bitcoin uses a different system for value as it not issued or regulated by a central bank or Government, therefore is not subject to Government policies proving why it has a different system to cash With Bitcoins price primarily determined by its supply, markets demand for it, availability, competing currencies and investor sentiment, finalising, why it could appear as an unsuccessful/inefficient currency

In conclusion, I believe with all the information collected during my research I have come to a valid end to this ongoing argument Even with all the positives of Bitcoin, you can clearly see from the evenly distributed facts provided that cash stands tall over Bitcoin Cash is legal tender, ensures privacy, it’s inclusive, helps keep track of expenses and is a store of value

These exact reasons and many more force cash to come out as the victor, backed up by history of its value running the economy of the UK for over 300 years. Whereas crypto has merely completed 11 years, already coming to an unsteady balance with markets crashing across the board, proving how main cryptocurrencies like Bitcoin and Ethereum would struggle to run a sustainable economy due to minor faults that could cause major issues and disruption

Many fans of cryptocurrency will consider it as a legitimate currency as they see it as ‘the ultimate currency for free people’, but no Government in the world recognises cryptocurrency as a legitimate currency It appears as to volatile to serve as a currency, showing how it is just a snippet of codes, displaying how crypto is not seen as a currency nor an investment Finalising why I believe crypto is not a legitimate currency