For almost two years now, more and more people have been keenly interest in or been trying to create a new cryptocurrency. While some of the investors claim that cryptocurrency is the future of money, others fuelled by courage and a strong sense of entrepreneurship say that “it will be my cryptocurrency that will dominate the world”.
I’ve been trying to give the following insight to people I meet in Turkey as well as in other places of the world:
The foremost problem of a new value mechanism is whether it will be able to find and convince people and institutions that are willing to use this new value as a medium of exchange. Cryptocurrencies’ capability of being used as a medium of exchange, transaction, investment-saving and finally as a store of value is definitely more important that their capability of being traded as a commodity.
Actually, there’s one thing that determines the value of this instrument (made to replace paper money) as a commodity: its “national and international recognition” as a currency.
So, in order for crypto currencies can get recognised, people will need to consider them as a medium of exchange to begin with, not as a stock certificate.
That’s why it’s crucial to build an infrastructure to configure cryptocurrency with an interface to be integrated in POS machines before supplying it to investors. Also, it’s equally important to carry out necessary procedures to install Android/iOS compatible cryptocurrency applications on smart phones.
“How to create lasting value…”
As for cryptocurrency’s supply to investors; People’s and markets’ reaction to your new cryptocurrency on the “first day” of its launch will determine its value. Just like a public stock offering… Therefore, all necessary measures must be taken and all necessary must be completed before launching a new cryptocurrency.
It would be also important whether the new cryptocurrency offers consumer the capability to use credit or debit when shopping as there is a huge credit utilization ratio per consumer around the world. So, the new cryptocurrency will need to be configured as such to be compatible with credit and debit cards.
Another important fact is that banks today offer periodic instalments, and flexible usage opportunities in addition to their bonus and miles offers. Cryptocurrencies’ inclusion in such loyalty programs would help increase interest in them.
Cryptocurrencies must be integrated into money-loan-payment mechanism in order to ensure their permanence in not only in B2C, but also in B2B transactions. I can almost hear you ask, “Should we see consider cryptocurrency as a medium of exchange or as an investment instrument?” My suggestion is that we should see it as both of these things. Here’s why: TRY’s past performance has never allowed it to be valued as an investment instrument. So, the new foundations of a new cryptocurrency must offer what’s necessary to ensure the new cryptocurrency can be used not only as a medium of exchange but also as an investment instrument. As mentioned hereinabove, we should create a new value that possesses a majority or all of money’s most important functions, thus making both persons and institutions want to have this new cryptocurrency.
