Could Cryptocurrency Be the Future of Commerce?

     Recently, there has been a lot of discussions about the role of cryptocurrency in our economies and the ways that it will transform commerce. The latest news that spurred this discussion is Tesla’s revelation that it had invested 1.5 billion dollars in BitCoin, a very popular cryptocurrency. The SEC filing also stated that Tesla is considering accepting BitCoin as payment for its products. Media revelation of this news caused BitCoin’s value to reach an all time high of almost $50,000, with Tesla’s 1.5 billion dollar BitCoin investment increasing by more than one-billion dollars, amounting to a total of 2.5 billion dollars. Analysts confirmed that Tesla made more money from its BitCoin investments than it did by selling its cars and solar equipment in the fiscal year of 2020. 

     This news has also rekindled the debate on the future of cryptocurrency and its ability to replace the monetary bases we use worldwide, such as the U.S. Dollar and the Euro. Oppositions of cryptocurrency argue that it would be impossible to conduct normal business due to its value’s unstable nature. They argue that cryptocurrency is still viewed as an investment instead of a spendable form of currency by many. Cryptocurrency transactions also require  about ten minutes for verification, which is very time-consuming, especially if the user is simply shopping at the local supermarket. 

     On the other hand, proponents of the idea highlight cryptocurrency’s positives. They argue that it is traceable, meaning that “black money” will cease to exist, while maintaining anonymity, which makes users less susceptible to hackers and other cyber threats. They also argue that using cryptocurrency makes international trade more convenient. Currently, international currency transactions often require a third-party, either the respective governments or a currency-exchange, to act as a broker for the transaction. With cryptocurrency, two parties from separate corners of the world can conduct transactions with no intermediary involved. 

     There are both pros and cons to using cryptocurrencies, but they can only be treated as currencies if their values become stable and predictable. None of the current cryptocurrencies fit that guideline, so there is still a long way to go before they can become the world’s standard currency.