Cryptocurrencies are forms of digital currency that use cryptography to ensure secure transactions and to control the creation of new units. They operate in a decentralized manner, meaning that they are not controlled by any central authority, such as a government or a central bank.
Cryptonite or supercoin?
That the Internet has changed our way of living is undeniable but, Will there be an end to what you can actually modify?
Our way of socializing and communicating, of getting entertainment, of storing information, even of making purchases is not even assimilated to a decade ago.
That someone with sufficient knowledge and resources also decided to produce a change in our monetary system It was just a matter of time.
Indeed, This is another text directed towards the cryptocurrencies (there are already many opinions), to the point that perhaps they have received more words from experts and not so experts than Juliet received from Romeo.
But in this case not all dedications are good.
Many people have defended cryptocurrencies, but most experts are reluctant to definitively admit them.
It will be, therefore, my objective in this text to compile everything that I have been able to gather in opinions and facts to justify the existence of said coins.
What are cryptocurrencies?
An initial description is required, although this new means of payment has been on everyone's lips, not everyone knows what it is in depth.
In short, it is a system of cyber-currencies that only exist on the Internet (nothing physical), which takes advantage of the increasingly common presence of electronic transfers and payments to sustain its use.
There is a great diversity of them (+ 2,52 million in 2024), and more and more appear.
They are therefore born as an alternative to our everyday currencies.
In and of themselves, they don't sound very attractive given that description alone. Why use these coins if Internet businesses accept the one I already have?
Well, the truth is that they have certain “advantages”.
Objectives and Popularity
Its objective as a global currency, which aims to be a single payment system that breaks down borders, or its difficulty in being tracked, which grants anonymity, are some of them.
But the biggest reason why they have become popular goes even further. It is about They eliminate intermediaries, governments and banks.
Blockchain
The method "blockchain", which consists of all users keeping copies of the transactions made with cryptocurrencies, and the decentralization of this means of payment, they manage to separate them from any financial or government institution.
It is an interesting feature, since disables abuse of power over currencies, avoiding censorship and blocking.
Furthermore, the aforementioned method "Blockchain" It provides security against deception, because even if someone wants to modify their funds or alter a payment, they will only do so in one copy, compared to the rest of the existing millions.
And added to all of the above, we must add that they do not require a bank account, an important facility for many people.
But I didn't use quotes around those “advantages” for nothing. To begin with, it is ambitious to believe that cryptocurrencies are going to become a single global medium, since there is the United States... which, of course, wants to maintain the hegemony of the dollar.
There is also the one that inability to trace them makes them suitable for illicit transactions.
Of course, the fact that they do not have a central government mediating their use also leaves users unprotected against non-payments or scams of a certain nature.
But that's just the beginning. Cryptocurrencies do not even meet the definition of currency, since They have too volatile a value.
This is because, at not being centralized or regulated, users have set the price in cryptocurrency portfolio transactions, turning them into a financial asset that has suffered from a very dangerous bubble.
Use as Investment
That's also where the use of these as investments comes from, which wouldn't be so bad if it weren't so viral, which has attracted people lacking investment knowledge, causing the aforementioned bubble and fostering scams and losses.
Distrust of some governments
This and its unpredictable effect on the current financial system is what has made many governments distrust them, and many other businesses not even accept them (they are legal in most countries, for now).
Hacks and Energy Consumption
Finally, it should be highlighted the fact that Its computational complexity can lead to hacks, and that their energy consumption (since they require a multitude of servers) is calculated as high as that of all of Ireland.
Alternatives for beneficial use of cryptocurrencies
But we must make the best out of every difficulty, and it is time for governments to offer a viable solution.
We must be able to obtain the benefits of these currencies while eliminating their drawbacks.
Katharina Baker (expert in the field) suggested the adoption of a controlled cryptocurrency market that protects users.
Another alternative is the creation of these by governments, so that they can be used to the maximum within legitimacy.
Why did Cryptocurrencies emerge?
The reason why the phenomenon of cybercurrencies has occurred has been the lack of speed of our rulers, who do not usually leave their bubble.
Keep a static system Over the years, when there are useful advances around, it is a symptom of lack of creativity.
That creativity that the creators of currencies like bitcoin have had, using available technologies (and perhaps a pinch of rebellious pessimism against banks and governments with a bad image), have given birth to a new, even more abstract era of payment methods.
Collaborator at Reáculoateypunto, graduated in Business Administration and Management at Loyola University, debater and connoisseur of the world! I studied for a year in Derby, and I have work experience in public administration. I am passionate about business administration and national and supranational institutions, especially financial matters and international economics... And that is why I write and share my opinions on these topics!
