The Digital Economy Minus Brick and Mortar Financial Institutions

 Posted By - Steve Brody

 Views - 405

  6 September 2019



 

I went to the deli for lunch this afternoon and paid with cash. The person in front of me paid via credit card. My transaction was person to person, no middle person involved. The other person by paying with a credit card brought in a third party to execute the payment. That third party being a financial institution such as a bank. A bank that most likely has a physical brick and mortar location. These two payment methods have been standard practices for many years. A third payment method is now upon us and is gaining popularity and acceptance among a number of consumers and businesses alike. This third method is cryptocurrency.

The acceptance of crypto-currencies is growing globally whether it be in less developed regions or well established ones. Traditional financial institutions are looking into developing support for crypto-currencies and are figuring out how to monetize it. The real tell on acceptance is found on university campuses. More than 50 percent of higher education schools are now offering cryptocurrency courses. As more students become educated with the technology and processes behind cryptocurrency the more you will see acceptance across a broader spectrum of businesses.

The Digital Economy encompasses Cryptocurrency as a payment method and Blockchain as an underlying and secure transaction platform. There are a number of crypto-currencies, two popular ones are Bitcoin and Ethereum. In today’s payment structure we have a multiple of currencies that are supported by individual countries such as the dollar in the United States and the Euro supported by the European Union. One may wonder in the not too distant future will there be a singular global cryptocurrency or will nation states create their own cryptocurrencies?

As cryptocurrency becomes more and more popular undoubtedly the attempts to hack the system will occur in greater frequency. Blockchain as the underlying platform has a reputation of being nearly one hundred percent secure. While blockchain is one of the most secure platforms we have today, it is not one percent secured. It all comes down to how well the blockchain is built and installed. Poor programing or lack of attention to the blockchain processes will enable a hacker to breach the system. With that said if the platform is built to blockchain specifications you will pretty much have a locked down platform.

Cryptocurrency is here now and it will not being going away. Will the physical paper and coin based money go away? It won’t in the short term, but what of the long term? We shall see.

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