THE MONEY IN THE NEW ERA - 1 - Can Cryptocurrencies Acquire the Role of Money? -

 

1.Money and the Future

Humankind has used a lot of materials as money throughout history from barter economy until the modern economic system. It is known that from the start of civilization until today we have used precious metals, objects, paper and even sea shells as money. 

Along with technological developments and evolution of globalism there has been new inventions, discoveries and terms come into our daily routine life. Naturally, It is inevitable that these changes has emerged in economic system also. Especially after 1990's, technology and evolution of globalism bring to our life a new sort of money called cryptocurrency during the recent years.

In order to know or predict if any other object or system like cryptocurrency could be replaced with the fiat or paper money system or used as money in the future, first of all, we have to understand the role and usage of the money throughout the history. At this stage it is very crucial that we have to consider functions of money.

On the other hand, discussing future role of the fiat money system and cryptocurrency is a very complicated issue. The way of understanding these phenomena are related to consider closely and together globalism and technological developments. After considering these issues, it is very clear that trust must be regard as an important topic to analyse. It must be said that even you have a powerful concept and system for cryptocurrency, you have to make people and the community believe and trust it. Because there is no chance for a currency to live long unless trust and belief for it.

 

2.Most-Known Cryptocurrency -Bitcoin-

Even though idea of electronic money dates back to 1980s, Bitcoin just started in 2009 by its creator Satoshi Nakamoto. 

According to Douma (2016: 9) Despite the fact that the European Central Bank doesn’t take Bitcoin as a currency, it still insists that European Central Bank is responsible for the impacts of Bitcoin and its usage especially in Europe economic zone. “Virtual currency schemes do indeed fall within central banks’ responsibility as a result of characteristics s1453297 10 shared with payment systems, which give rise to the need for at least an examination of developments and the provision of an initial assessment” (European Central Bank, 2012).

At the same time with European Central Bank. the European Banking Authority also says, “the usage of the term ‘currency’ is misleading for several reasons, including the insinuation that it is therefore exchangeable against other currencies, which may not necessarily be the case” (European Banking Authority, 2014). From this we understand that the European Central Bank holds central banks responsible for transactions made by using Bitcoins (to protect people).