Cryptocurrencies will cohabit for a long time with fiduciary money

NEW DEVELOPMENTS THAT WILL REPLACE THE PAYMENT SYSTEMS WILL ARRIVE

By Alex Vallenilla / @alexvallenilla

Still the cryptocurrencies can not suppress the fiduciary money, on the contrary they depend a lot on this to be able to work or to capture liquidity. All cryptocurrencies are referenced in fiat money, bought and sold in dollars, euros, yen. When transfers are made they are referenced in fiduciary money. This indicates that these digital assets, until now instead of replacing the common money, have served as a vehicle to transfer it from one person to another, yes, anywhere in the world and in much shorter times than traditional banks.

The exchange of information encrypted through the network of each cryptocurrency, its encryption process, the verification and confirmation of the operation, is intended to deliver to a receiving user a number of bits or data, which the market has assigned a value in the currency in which it is agreed or marketed for each case. It is one of the basic functions of blockchain technology.

Since we know the purchase of two pizzas with 10 thousand bitcoins, in the beginning, and the recent purchase of a house in Florida, USA, for 455 bitcoins, there have been few transactions denominated in the cryptocurrency, which of course used as an underlying the price of the same in dollars or in a selected currency. There are a number of websites that promote payment with this resource, there are platforms like LitePay that promote using tokens to make payments directly without having to use fiat money, but always deprive convertibility at the moment, such as the recent platform that uses Litecoin.

Until now, cryptocurrencies have a necessary counterpart to fiduciary money, which, according to some promoters of blockchain technology, declares their near demise. Especially the speculators who use them to take advantage of the high volatility margins, inject fiduciary money that allows to maintain the functioning of these markets, it is still too early to define if the exchange negotiations will be only with bitcoin, with ethereum, against a certain good , it is also too early to establish what governments will do to regulate technology, politicians will understand the blockchain and adopt it, since the number of global banks increasingly interested in hosting this invention, despite the fact that its directors have pronounced themselves against cryptocurrencies, they are more, and invest in them, indirectly in the projects of the main online exchange houses that exist, in mining projects on an industrialized scale, in the use of technology for their own projects.

So far to enter the world of cryptocurrencies, fiduciary money has been necessary, what is kept in mind is that this digital good now has a price, accepted in the market, there is demand and supply, the yen and dollars continue being the currencies that provide the highest volumes of liquidity that digital assets need to be what they have come to be, is an issue that will remain so for a long time, until there are new developments that begin to change the vision. The crypto anarchists have made a great approach so far, governments, the system, look with suspicion, because so far the exchange through blockchain technology, despite the much needed liquidity provided by the fiduciary money, it is a question of way out of state controls, the monetary policies of each country, to adopt one in common, globally, as a form of protest, an approach to freedom. 03/14/2017

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