Cryptocurrency is creating the future of money. Developed over millennia, money is a commodity accepted as a unit of account, medium of exchange, or store of value. Radical transformations follow societal needs, introduction of innovative technologies, and math-driven financial engineering. For example, the introduction of double-entry bookkeeping in 13th century Florence, Italy.
Inspired by meltdowns like the global financial crisis, unlimited money printing, and increases in surveillance capitalism, a powerful, human-centered theory of money, based on mathematical certainties, was introduced: Cryptocurrency (aka digital assets, aka Crypto, aka Tokens).
Crypto has the potential to radically shift the perception and purpose of “money.” How it’s used, employed, generates value for people, business, and networks.
Cryptocurrency (aka “Crypto”) is a digital token, transferred cryptographically, recorded on a distributed ledger, verified by nodes without “trusted” intermediaries. Crypto is a unit of account, medium of exchange, and store of value.
The key mechanical innovation that enables Crypto is the blockchain. Every transaction is recorded in a “block” and linked to each previous block in series. Cryptocurrency transactions are public, execute peer-to-peer, and verified by decentralized nodes across the network. Bitcoin, launched in 2009, is the world's first Cryptocurrency.
Use cases are endless. Blockchains enable new industries and permanently/radically transform existing ones as well as infrastructure and value generation.
This post highlights a few instances of how Cryptocurrency is pioneering the future of money and related services.
Crypto has introduced new ways of doing business in financial services and permanently changed the landscape. The fundamental nature of blockchains offer solutions to long-standing challenges such as transparency, immutability, and efficiency. Decentralization eliminates the need for intermediaries while reducing costs and processing times versus legacy systems. Moreover, blockchain technology allows for development of smart contracts and decentralized applications (dApps) that open unlimited layers of additional possibilities for automated, secure, transparent services.
Decentralized finance (DeFi) platforms, powered by digital currencies further extend Crypto’s potential. DeFi protocols offer a range of trust minimized financial services including lending, borrowing, yield farming, and peer-to-peer exchanges.
Certainly, many of these services are available in the traditional finance system though far more limited. They are slower, more expensive, and require lots of paperwork. Limitations that effectively exclude large populations of people from the system.
DeFi reduces transaction cost, increases transaction speeds, creates flexibility, and minimizes trust requirements. A Crypto network’s benefits are open and available to everyone, not just those who align with arbitrary distinctions defined by centralized institutional or governmental institutions.
The promise of Crypto and DeFi is that actions and history are more relevant than paperwork, that everyone can participate, that good actors are rewarded. Finance, democratized. These services, accessible to anyone with an internet connection, allow individuals to take control of their finances and participate freely.
Cryptocurrency is the architect of the future of money transactions and a cheat code for financial freedom. Digital assets transcend borders with near-instant, cost-effective, immutable transactions, agnostic to location. It is always on and globally available.
Token transfers happen instantly, to and from anywhere in the world, without intermediaries. The Crypto economy means faster cross-border payments, drastically reduced costs, and the elimination of escrow services, holding periods, and trust requirements.
Crypto completely redesigns the financial infrastructure for commercial and personal payments, commerce, banking, and support services. Digital assets eliminate nearly all settlement delays, minimize currency complexities, and make fiat currency fluctuations nearly irrelevant.
These features are particularly important for businesses involved in international trade, remittances, and supply chain management. Also, for individuals who support family in other countries, travel often, or send/receive payments internationally.
Further, decentralized, self-custody digital assets are more resilient to political and economic uncertainties and country-specific regulation because they do not rely on centralized authorities.
Cryptocurrency increases financial inclusion. According to the World Bank, approximately 1.4 billion adults worldwide remain unbanked and lack access to basic financial services. Primarily driven by challenges of trust, paperwork, and access. Digital currencies bridge the gap offering secure, cost-effective mechanisms to store and transfer funds without the need for centralized banking infrastructure using only a smartphone.
For this population, digital currencies bring opportunity and inclusion. For them, Cryptocurrency is the future of money. Crypto gives them the means to participate in the global economy, engage in commerce, send and receive remittances from abroad, and contribute to their own economic success. They are no longer left behind.
Importantly, access to Crypto tools and services do not require any of the traditional paperwork and documentation needed for utilizing services from traditional services and legacy financial institutions. One exception, however, is converting Crypto to local currency via a fiat ramp and requiring “Know Your Customer” (KYC) processes.
Individuals can participate in the global economy and gain control over their finances with just a smartphone and internet connection. Digital currencies empower individuals, promote economic growth, and reduce poverty.
Cryptocurrencies offer advantages in terms of efficiency and cost-effectiveness.
Traditional financial transactions, especially international transfers, are slow and expensive, involve multiple layers of intermediaries, complex processes, and document verification. Transaction delays, fees, and outright rejections due to insufficient collateral or financial history are typical.
In contrast, digital currencies streamline these processes, allowing near instantaneous transfers at a fraction of the cost. Also, collateral is public and verified on-chain. Blockchain infrastructure settles transactions in minutes, regardless of the location or time of day, and bypass typical blockers of legacy systems.
Of paramount concern for all money related activities are security and privacy. Crypto is purpose built for safety and confidentiality. Blockchains strengthen processes, facilities, and ownership.
On a blockchain, every transaction is public. A decentralized network of nodes verify each transaction within a transparent framework that minimizes trust assumptions amongst market participants. Equally, tokenization includes privacy preserving layers and re-orients ownership toward empowerment, self-custody, and personal responsibility.
Digital assets do not rely on centralized authorities to ensure trust and security. Crypto’s decentralized networks use math and economic incentives to maintain security, ensure assets are real, and verify transactions.
Further, a blockchain’s public ledger reinforces transparency and security. Anyone can view and audit the complete transaction history of a network. Transactions are nearly impossible to manipulate once verified and added to the blockchain. Immutability of transaction records is a key tenant of Crypto.
Crypto also enables new levels of privacy and anonymity. Cryptographic addresses and pseudonyms preserve user confidentiality. Publicly available transaction data does not contain personal information.
Crypto places endpoint security directly under the responsibility of users. Self-custody guarantees full ownership of the underlying assets and no third party can access the tokens. It also means individuals are responsible for adopting best practices, securing funds, and protecting account access.
As digital currencies empower individuals to control their finances, it is important to emphasize the importance of compliance in this emerging ecosystem. As governments and regulators struggle with the rapid growth of Crypto, regulatory frameworks are being implemented to ensure safety, prevent illicit activities, and protect consumers.
Compliance measures include Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations that require individuals to verify their identities and adhere to strict reporting requirements when converting between digital and fiat currencies.
The intent of these rules is to balance the benefits of digital currencies with consumer protection and financial stability.
Some argue these initiatives are the antithesis of trustless, peer-to-peer payment systems and the opposite of Bitcoin’s original ethos. Reality, however, is that Crypto exists within the larger economy. KYC and AML is necessary somewhere as DeFi challenges TradeFi and more people self-custody assets. Even now the only paths for introducing new fiat into Crypto or converting Crypto into fiat requires KYC.
In one vision of the Crypto future, fiat ramps are no longer required because all commerce shifts to the token economy. One token always equals one token. At that point, there is no need to interact with legacy institutions and no need for KYC.
Nash remains one of the best self-custody wallets and pioneered the compliant path to Crypto. In addition to industry leading security, Nash is regularly audited, registered by the DNB and FMA, and offers up-to-date legal and compliance positioning.
Cryptocurrency is forging the future of money. Digital assets represent a paradigm shift in the way money is perceived and used. Innovation, accessibility, efficiency, security, privacy delivered by the tokenized economy is a transformative force on finance. “Money” is changing.
Legacy institutions must adapt and adopt or risk marginalization and irrelevancy. They must embrace the benefits and potential digital currencies offer: inclusion; immutability, trustlessness, decentralization; networks, security.
Hundreds of thousands of builders, supporting millions of users, are building a new world. Growth is accelerating. Individuals and businesses are empowered. These ideas are driving the future of finance, technology, and business.