Aanika Shetty

Bitcoin, the first cryptocurrency, was released on January 3, 2009 by a Japanese programmer with the pseudonym of Satoshi Nakamoto. Since this day, cryptocurrency, more commonly known as “crypto,” has been adopted by many as a form to gain basic access to money or as an investment to get rich. Cryptocurrency has been so helpful to the falling economy of El Salvador that in 2021. Bitcoin became a legal tender in the country. On the flip side of the “coin,” the People’s Republic of China has banned all Bitcoin transactions in fear of money illegally exiting the nation. Overtime, political debates have arisen as to whether it would be beneficial for crypto to replace fiat—traditional money, such as cash and credit––currency. After weighing the sides, it is clear that crypto is the future because of its relatively increased security, easy accessibility, and power to lift small actors in the economy.

When it comes to finance, security is the primary concern. For the poor man with his last dollar, securing that dollar for the next meal is of utmost importance. For this same individual, his money would be much safer if it is in the form of crypto. Crypto is secure because each currency is stored on a blockchain. Blockchain is an open, uneditable ledger. This means that once a cryptocurrency transaction is recorded on the ledger, no one can edit or remove it. With blockchain technology, there is no room for human corruption in the finance system. In fact, according to Europol, the European Union Agency for Law Enforcement Cooperation, fiat currency is the primary mode for illicit-transactions, not crypto. To put this in a statistical perspective, as quantified by Anatol Hooper, finance expert and writer for Cointelegraph, in 2022, illicit crypto exchanges amount to $20.6 billion, barely 0.24% of the global GDP. On the other hand, in the same year, illicit fiat transactions amount from $400 billion to $2 trillion, about 2% to 5% of the global GDP. Some argue that blockchain is unsafe because anyone can verify transactions. However, this statement is misguided; one important facet of blockchain is that while one does not have to put their full identity on the blockchain, blockchain technology does have access to one’s IP address and illegal transactions can be investigated. As no central government controls the blockchain, anyone can call for suspicious activity to be investigated. For example, when Russian hackers took crypto ransom from the Colonial Pipeline company, all the money was able to be retrieved from the hackers—only because of the information stored in the blockchain. In the long run, if crypto completely washes over fiat, fiscal security will be much more guaranteed. 

Another one of crypto’s powers is its reach. Since crypto transactions are supervised on the blockchain, rather than centralized governments, anyone can receive money in the form of crypto. This is especially important for poor and oppressed citizens in dictatorships, where money is hard to come by. Luckily, with crypto currency, individuals are able to send remittances to family and friends in tense political situations. For example, after the Taliban’s incursion of Afghanistan in 2021, Western Powers, such as the World Bank, have cut ties to the nation. This became problematic for the Afghani citizens as they could no longer receive foreign aid the traditional way. Luckily, crypto allowed people from other nations to send money to Afghani citizens via the blockchain—all without Taliban interference. To top this off, the crypto transactions only took seconds to be verified, whereas fiat transactions in this place would have taken days. In life-and-death scenarios as such, quick transactions proved to be life savers as, according to Joshua Jahani, a lecture at Cornell University and New York University, “an internally displaced person, for example, cannot wait three to five days for funds to clear; they need food, fuel and medical supplies today.” Crypto is clearly a more practical option compared to fiat when in times of urgent need.

Last but not least, cryptocurrency provides a much more successful outlet for growth than the outlet of its fiat counterpart. Unlike fiat, crypto currency has fewer transaction steps than fiat currency, making it ideal for small businesses. The relaxation of regulation hurdles make it easier for small businesses to grow and support their workers. AccoSmall businesses are key to having a healthy economy. Financial expert Georgina Tzanetos writes: “According to the U.S. Small Business Administration, small businesses create over 66% of net new jobs. A recent report also shows that small businesses account for 44% of total U.S. economic activity.” In short, with the upper-hand of crypto comes the growth of small businesses, and ultimately, the strengthening of the economy and individual lives.

With its potential to grow economies and reach past national barriers while retaining utmost safety, crypto is the superior transaction tool to fiat. Of course, like every new concept, it can take some time to get used to crypto. However, it is important to take a chance on this new player in the global economy. It is true that crypto isn’t perfect, but it is an effective alternative to fiat in the facets of finance that matter most: security, accessibility, and growth. Crypto truly isn’t “cryptic,” but rather a box of fortune. The hardest part is taking the leap to open it.