How Will the World Strike a Balance Between Fiat and Cryptocurrencies?
Oleg Kurchenko is an entrepreneur and the Founder of the digital assets exchange Binaryx.
“Today, we’re talking about current cryptocurrency versus fiat currencies, and that conversation has been on the airwaves for years at this point.
A lot of people are talking about Bitcoin or GameStop, and it’s easy to see why. Currency discussions are reaching more people [than ever]. You will have heard about cryptocurrency, Bitcoin, Dogecoin — they range in levels of seriousness and financial power, but have a few commonalities.
They’re all digital with essentially no physical presence and are usually decentralized.
And then we have got fiat currencies. Even if you are not familiar with the name, you will have used them before. A Fiat currency is any government-issued currency that doesn’t have some form [of commodity backing].
“Financial crises have rapidly happened due to things like hyperinflation and overproduction of money, like the situation we have right now.” – Oleg Kurchenko
So, there is a currency clash on several fronts, with the coagulation factors being especially important to investors, corporations and nations.
Firstly, there is a reason why a Fiat currencies have been the norm — full control of how much a new currency is created, and nothing’s directly linked to some physical resource, such as precious metal or something else.
And they are widely handled all over the world.
However, fiat also has a range of weakness. If a nation become weaker or unstable and unsustainable, the currency can rapidly fluctuate in value.
Financial crises have rapidly happened due to things like hyperinflation and overproduction of money, like the situation we have right now.
With cryptocurrency, first of all, there is an actual resource behind it. But incredibly long blockchains of code and encryption are so complex, they’re non-forgettable, and you like that solution.
That software is the value of the cryptocurrency, and they’re attached to specific owners with the little room for confusion.
Anyone can mine it or trade it without any problems. If you have the access to internet, you can use the cryptocurrency for myriad different things.
So, it is trendy, because the technology behind the cryptocurrency is exciting and being utilized with almost every industry from healthcare to gaming.
In the future, you will see that it does have a lot of disadvantages like the sheer complexity and the technology behind the cryptocurrency. Blockchain has a huge resource drain and definitely clashes with the ongoing climate crisis — it simply requires a lot of energy to mine and maintain an ever-growing amount of cryptocurrency mining.
Despite these negatives, crypto is still omnipresent and ever-growing with no signs of stopping.
The world is approaching an economy with the balance between the two, which creates the perfect opportunity for thought leaders to capitalize on this shift in relationships.”
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