Cryptocurrencies are about value. Crypto professionals like Saleh Stevens would tell you that they are supposed to be about intrinsic value. Fiat currencies and credit cards are not.
Value and Money
Even fiat currencies have some value. The term fiat refers to a formal authorization. In the case of money, it puts the reputability of a nation’s economy on the line. Essentially, fiat currencies are backed by the operational infrastructure of a country. While a holder of a Dollar cannot go to a bank and exchange a Federal Reserve Note for anything tangible, it remains as reliable as the highest levels of accredited institutional administrations.
Credit Cards are Not Currencies
Credit cards are not currency in any sense. They are essentially an authorization to use the bank’s money. Credit transactions make up accounting records that are settled over a set period of time. Ratings of individual card holders replace the national reputation. Credit cards are promises to pay. The individual makes a promise that is made possible by leveraging the capital of a large credit corporation.
Cryptocurrencies have Value
There is no effort on the part of a piece of fiat paper to provide any value. It exists as a share in a pool of the entire community. Cryptocurrencies are different. At the most basic level, a cryptocurrency transaction is recorded forever. This is essentially establishing ownership of a digital asset. That record remains even after a crypto coin is spent.
What Smart Contracts are Capable Of
Smart contracts allow for more elaborate applications of cryptocurrencies. They employ programs to assign ownership to complex digital assets, such as, mobile apps. More recently, crypto contracts have been applied to real property.
Use Case
For example, consider how the purchase of a home in fiat money differs from a crypto purchase. When using fiat money, only a local municipality identifies the owner. Now, imagine if the whole world held you accountable for your property in Nowhere Kansas. And, imagine if the record of your transaction was forever permanent.
Credit and Crypto Don’t Match Up
Establishing a cryptocurrency visa is counter intuitive. Some would even say unnecessary. The initial purpose of credit cards were to speed up monetary transaction. The advent of digital communication provided motivation for this. But, as society would realize, credit can be economically unhealthy.
The banking crisis of 2008 illustrates just how damaging credit systems can become. Long before the bailout of the big banks, many individual consumers were overwhelmed by exorbitant interest rates and fees. Furthermore, an increasing number of people were going bankrupt.
Emerging Solutions
One reason that a crypto visa might be entirely irrelevant is the emergence of crypto lending. This enables crypto users to keep their staking position in a particular coin while drawing fiat money from it. The only catch is that the money must be repaid along with any interest and/or terms. As one might imagine, crypto lending is particularly valuable for long-term investors who believe that crypto will eventually become the dominant currency of the future.
Conclusion
With crypto, the world has a new chance at a sustainable monetary supply that provides stability for individuals and businesses alike. The more one gets involved in crypto the more elaborate its applications appear. Just consider, what exactly is the limit of a smart contract, a computer program. Investors and software engineers like Saleh Stevens know the potential of this technology. It is time for the world to as well.