When cryptocurrency was first introduced, a lot of people did not think it would last. They may have dismissed it as a fad, such as a new diet or style. Now, cryptocurrency has proven that it is going to play a role in the economy moving forward, with countless options such as an ETH Exchange. On the other hand, can cryptocurrency actually be used as a medium of exchange for goods and services? The answer is yes, but it also is important to take a look at the role it may play.
Cryptocurrency as an Option for Illegal Payments
So, the first way that cryptocurrency can be used as a medium of exchange for goods and services is through illegal payments. Undoubtedly, cryptocurrency has been used for years to evade the law. For example, many people have heard about something called the Silk Road, which was the first darknet marketplace for illegal drugs. There is no way that this road could have existed without Bitcoin.
Eventually, the US government seized the entire Silk Road in 2013, taking more than 140,000 Bitcoins in the process, which had a market value (at that time) of more than $48 million. In addition, cryptocurrency has been used for a number of other illegal purposes as well, such as hiding wealth from the government, money laundering, hacking, and circumventing wealth and capital controls.
What about using cryptocurrency as an option to make legal payments?
What About Cryptocurrency and Legal Payments?
Of course, there are lots of people who are wondering whether or not Bitcoin and other forms of cryptocurrency can be used to make legal payments. There are two attributes that need to be considered. The first is the cost of the transaction. The other is the speed of the payment.
When people make an exchange using traditional currency, they are used to this transaction happening quickly and easily. They simply use a piece of plastic or swap some coins or pieces of paper. On the other hand, cryptocurrency is not so easy or cheap. When someone makes a transaction using Bitcoin, there is usually a fee that has to be paid to Bitcoin miners. In addition, computers need to validate the fact that the transaction is legal and actually took place. In some cases, these fees might be as high a $20 and they are rising. This can make Bitcoin expensive for some people, particularly smaller transactions. In addition, it can take a while for Bitcoin miners to complete these transactions, making it slow. These are the biggest barriers when it comes to adopting cryptocurrency as a medium of exchange for goods and services.
The Growing Role of Crypto in the Economy
Despite these barriers, the role of cryptocurrency in the economy is growing. There are researchers who are exploring the possibility of reducing the cost of using cryptocurrency as a medium of exchange for goods and services. There are also researchers looking for ways to make cryptocurrency transactions faster. By addressing these barriers directly, it might be possible to get more people on board with the possibility of using cryptocurrency to replace traditional currency.
The Role of Crypto Is Evolving
Ultimately, the role of crypto is still evolving. The currency has come a long way since it was first introduced and has proven that it has staying power. On the other hand, sticking around as an investment tool is one thing. Using crypto as an option for purchasing goods and services is something else entirely. It will be interesting to see what happens with crypto moving forward.