Bìznes Inform (Nov 2022)
The Evolutionary Development of Money: From Minted Coins to Cryptocurrencies
Abstract
The article is aimed at studying the evolution of money. The article examines the history of the emergence and evolutionary development of money and cryptocurrencies. Blockchain technology is analyzed, as well as the technological difference between Bitcoin, Ethereum, Solana cryptocurrencies is considered. The issues of the operation of the Ethereum blockchain and smart contracts are covered. An analysis of blockchain technology and the use of cryptocurrencies as a means of payment is carried out. The type of cryptocurrency such as a stablecoin is revealed in its variety. Comparisons of native blockchain coins and stablecoins as a means of payment, further of USDC and USDT stablecoins, are made. An analysis of differences between the centralized and decentralized stablecoins is carried out. It is specified what the stablecoins USDC, USDT, DAI are backed by. It is analyzed what share of the market is occupied by USDT, USDC, and DAI. The advantages and disadvantages of stablecoins are identified. A characterization of activity of the Central Bank Digital Currency (CBDC) with its connection to central banks is presented. It is determined that stablecoins are an attempt to objectively eliminate the high volatility of traditional cryptocurrencies such as Bitcoin or Ethereum by tying the value of a stablecoin to one or more other assets, such as fiat currency. Blockchain technology along with stablecoins can increase the efficiency of cross-border payments. With the growing demand for use, a stablecoin can become one of the important elements of the payment infrastructure. As result of the study, a comparison between cryptocurrencies and the companies Visa, Paypal in terms of processing speed and the amount of payment commissions is made. It is determined that blockchain and cryptocurrency technologies are a new evolutionary stage in the development of money. It is substantiated that the effect of using blockchain technology allows to cheaper and faster money transfers. It is noted that blockchain technology is young, but cooperation between traditional financial companies and cryptocurrencies is already visible.
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