UNAIR NEWS – Cryptocurrency has become an increasingly dominant topic in global economic conversations. Claims that it has the potential to replace conventional currencies in the future have invited extensive discussion. Cryptocurrency is an innovation that emerged from the application of blockchain technology. The technology allows recording and verification of transactions without the need for a centralized server.
Lecturer of the Faculty of Economics and Business (FEB) Universitas Airlangga Muhammad Said Fathurrohman SE MSc said that cryptocurrency is currently in the experimental stage in the evolution of the monetary system. Its success still depends on its acceptance and widespread use by the global community.
"The current position of cryptocurrency is seen as an experimental stage. Initially, the technology was adopted by a group of early adopters, but its success depends on whether its benefits are widely felt by the community," he said.
Advantages..
Money has evolved from a physical commodity to a fiat currency backed by a state. However, cryptocurrencies do not have state backing and their value is not tied to a physical commodity. However, cryptocurrencies have the advantage of being unaffected by government intervention.
"Cryptocurrency has the advantage of not being affected by government intervention. Although this may seem like a weakness, it can actually be an advantage because the government does not necessarily manage money well," Said explained.
Challenge..
He also explained that the challenges facing cryptocurrency to be widely used are its legality under government regulations. While that is a significant challenge, the main challenge is actually related to the network effect.
Every platform needs a strong network effect where the more users join, the more valuable and attractive the platform becomes. Mass adoption can be triggered by a broad economic event or crisis where cryptocurrency can become an attractive alternative for the community.
"Cryptocurrency can experience mass adoption in situations of economic or financial crisis where conventional currencies experience a significant drop in value. In such conditions, cryptocurrency can be an alternative solution to replace the currency in crisis," he said.
Risks and Steps Towards..
The main risk of cryptocurrency is its volatility. While price fluctuations can be attractive to risk-averse investors, for the general public, large fluctuations in value are a serious problem. Sudden loss of savings can be devastating for most people, despite the potential for huge profits.
Said said there needs to be steps to make its value stable. "One way that can be taken is to link it to fiat currency or other stable assets, thereby reducing fluctuations in value and making it more acceptable to the wider community," he concluded.
Author: Rosali Elvira Nurdiansyarani
