Thanassis Stingus, professor of economics at the University of Guelph, said he doesn’t expect it to become a popular government currency anytime soon, despite growing interest in cryptocurrencies.
There is no doubt that this cryptocurrency and blockchain technology is becoming more and more popular after the explosion and success of Bitcoin.
“The advantage of this idea is a kind of universal money that everyone unnecessarily accepts through exchange rates. The main obstacle that exists and that will never go away is that currencies are central banks and governments. “before. Basically, they do this to manage monetary policy. This Policy is one of the main tools for managing the economy of expansion and contraction.”
Investors in cryptocurrencies, especially Bitcoin and Ethereum, have recently seen their investments pay off, and this figure continues to rise in the stock market.
Stengos said this puts a lot of computational demands on the system where all transactions must be verified through the blockchain.
“From a computational standpoint, the problem is very complex. The computational power requirements for processing and recording these transactions are huge,” he said. Of course, you don’t want the market to be flooded with digital currencies and money. Of course it has lost its value. A key principle behind the original design of digital currency is to create a limited supply that is governed by the need for accuracy.The solution to this problem is basically the long-term use of the computer to solve these problems. ”
Stengos said he believes the government is using monetary policy as a means of controlling the economy and will not relinquish control to offer crypto as the currency of choice.
“People can use cryptocurrencies for transactions. Usually they are people who want to avoid the checks and balances of government supervision through banks that manage the amount in their accounts. The idea here is to record crypto transactions. Without an intermediary bank for this,” things would also be out of sight. Fully control. In fact, things will not be tracked. The question here is how to ensure the execution of the transaction and its transparency. Stengos asked. “Everyone involved in the process confirms the transaction.”
Stengos said the problem was very simple and the reward was higher when digital currencies like bitcoin first entered the market.
“At first, one bitcoin was worth a few cents, but it was nothing. Of course, now it is a speculative asset. People wonder if prices are going up or down. I think. Existing currencies, now they compete with each other. Bitcoin can be one of the most standard and safe cryptocurrencies on the market right now.”
The two main digital currencies that are becoming more and more popular are Bitcoin and Ethereum. Stengos said that the power requirements in the verification and collection process have greatly increased the power requirements that were unimaginable when the cryptocurrency was first introduced.
“These things greatly increase the need for energy to mine new coins. Countries are starting to regulate and these replacements and payment schemes will never replace the majors. I’m starting to think they won’t, but they are used to trading things.”
El Salvador was the first country to introduce cryptocurrency as legal tender. Although the state took this step, it had problems implementing the deal.
“He adopted bitcoin as the main currency, which is as stupid as it is now,” Stengos said. I think people want more because Bitcoin is more stable. The case is just the opposite. You don’t want to go to a bar or grocery store with a currency that is losing value or fluctuating wildly. There is a lot of uncertainty and this will never be the standard of exchange that we expect currencies to be. “