What is Cryptocurrency?
Is Cryptocurrency a currency as the name implies?
The primary purpose of currency is to transfer value and to easily carry from one place to another or person to person. The concept of currency requires it to have a stable value and to be freely transferable. The paper money printed by the Federal Reserves, are what we use as currency daily. In other words, money is considered a centralized monetary system.
Cryptocurrencies are the modern currency of the internet. The ordinary people develop it for the public without any specific boundary, which makes it universal. The first cryptocurrency known to us is the Bitcoin, and it is believed that Satoshi Nagamoto or a group of people made this currency based on the blockchain technology.
According to different sources, there are several definitions or classification for cryptocurrency around the world, whether it is a currency, asset, commodity, security, or utility token. In the US, different agencies consider it differently, for example, IRS( Internal Revenue Service) regard it as a property whereas CFTC( Commodity Future Trading Commission) view it as an asset. The SEC(Securities and Trading Commission) consider most cryptocurrencies as a security token. Even different countries have a different opinion about cryptocurrency, for example, Japan believes this as a means of payment, Australia does not consider crypto as a full currency, but it has a more positive approach than most countries. Mexico considers this as a speculative asset whereas certain countries, it is illegal, for instance, Algeria and Egypt.
Does it have any character of standard currency? The answer would be both yes and no.
Why is it considered currency?
Cryptocurrencies, just like other currencies are easily transferable to one person to another or person to person. It is cheaper to transfer than traditional currencies.
Why is it not considered a currency?
Unlike the paper currencies, the cryptocurrencies are paperless. It is a decentralized universal currency. No country has its own cryptocurrency currently other than 'Petro' in Venezuela backed by the oil resources. Cryptocurrencies are highly volatile as the value of Bitcoin was up to $20,000 at the end of December 2018, and it went down to $3000, now back up to $8000 range by May 2019. There is no standardization or regulation of this currency yet.
According to my husband, cryptocurrency is a modern internet currency that needs specific regulations and should become a standardized currency, but he is very confident that it will become a standardized monetary system shortly and governments who take action earlier enough will be leading in the space of blockchain technology.
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