Crypto Wallets Can Be a Perfect Solution to Secure Your Property During the Financial Crisis
When the financial crisis hits,
is filling the crypto wallets safer than hoarding the gold, papers, or cans? Hopefully, recognizing the cause of the crisis will point to the safe ground. Nowadays, the US and China trade war can trigger the crisis due to its enormous impact on worldwide production costs. Furthermore, Coca Cola raising the price of its cans due to the tariffs on aluminum is a sign that shoppers will be the collateral of this crisis.
Unlike before, many factors contribute, such as Brexit and the rise of the world population. Not to mention that the digital age and its disruptors are creating new ones. Whatever is the cause, the old means of preserving the value may not be viable. Similar to people rushing to buy and store canned goods, changed habits may force people to online shopping. If this is the case, does following these new “digital” habits can turn people to the online storage of their belongings? If many foresee the demise of some fiat currencies, will the crypto wallets replace the regular ones?
The Former Methods of Storing the Value
Our ancestors would hold gold to preserve the value. Similarly, our forefathers would store cans of food to survive a nuclear war. Even though many don’t trust them, modern men chose to save money in banks.
However, the very same banks triggered the last financial crisis. In the case of the financial crisis, objective supervision to avoid the bankruptcy or the bank run is of utmost importance. For this reason, different countries have different legislation and government protection for deposits. In the case of the USA, every depositor can claim the insurance payout up to $250,000. However, if government bodies like FDIC aren’t securing the deposits, bank failure leads to loss of these funds.
At the same time, nobody can stop stacking food to survive the crisis. However, if a turmoil is on the horizon, the price of goods would rise. Tracing back to the times of Irish potato famine, the theory of Giffen good explains this. A Giffen good is a type of good people buy more as the price rises and vice versa. The recent surge in buying cryptocurrencies during the “bull market” is another example of the theory.
On the other hand, the value of gold records “the bull run” with a few downtrends. It is because it is still captivating for both men and women. Gold in any form won’t rust, and it preserves its beauty throughout the ages. In addition to maintaining the beauty and the value is the fact that all gold reserves can fit in two swimming pools. Due to its scarcity, the first coin was a mixture of gold and silver. This mixture also exists in nature as “electrum.”
Crypto Wallets: Storing the Digital Value
Similar to storing gold, cold crypto wallets keep cryptocurrencies in offline, external storages. More secure and more manageable, crypto wallets are the perfect solution for the financial crisis. Furthermore, crypto notary services can record ones’ possessions in a tamperproof manner. The blockchain is introducing these solutions as well as the plethora of different crypto wallets. Besides cold storages like Ledger Nano, there are many other “hot crypto wallets” worth mentioning:
Having the same name as an abovementioned mint of the silver and the gold, Electrum is one of the first crypto wallets, exclusive for the Bitcoin. Bitcoin is the first and the most valued cryptocurrency with its creator unknown. Since it is decentralized, many compare it with the gold.
MEW, as it is the crypto wallet’s acronym, is the official Ethereum wallet. Comparing to Bitcoin, Ethereum was a massive improvement. Recently, Ethereum is struggling in implementing protocols to improve its transaction speed. However, MyEtherWallet has partnerships with Bity, Kyber Network, Changelly, and Simplex allow swapping for fiat currencies and Bitcoin.
An open-source for XRP (Ripple), one of the cryptocurrencies with the fastest speed of transactions. Unlike Ethereum, the Ripple protocol needs a small number of validators, thus making the platform faster. However, institutions can use Ripple protocol regardless of Ripple’s cryptocurrency – XRM.
One of the Stellar crypto wallets, Bitfoliex supports XLM (Lumen) and its proprietary coin – XLM. Different than Ripple, Stellar network requires its cryptocurrency to avoid the network spam. However, it allows the creation of other tokens, too. For instance, Bitfoliex uses its proprietary solution Traxalt. Building upon the speed of the Stellar (Ripple successor) platform, it supports other leading cryptos, too.
On the other hand, there are crypto wallets that support multiple cryptocurrencies in a single interface. Not dedicated to any, Atomic offers 300 cryptocurrencies and tokens.
Since we already have e-commerce and autonomous checkout stores, it is hard to believe in the reverse effect of the financial crisis. In a world that is more conscious about the ecology, storing cans in preparation for the doomsday is unthinkable. Far more certain is the scenario of massive adoption of crypto wallets or inventing new digital solutions. The study by the Trade Partnership predicts the US and China will cause a loss of 935,000 jobs in the US, and if it escalates – a million more. Therefore, the preservation of both employment and savings will be the key to survival.
However, in the scenario of worldwide inflation and banks’ closings, gold will become a Giffen good. As modern human needs are beyond the food and shelter, it is more likely that their providers would not accept fiat. Unless some solution appears, it will also be hard to transfer the gold. A famous coach Al McGuire claimed that he was treated as crazy when he was losing, and eccentric when winning. He also stated: “I come from New York where, if you fall, someone will pick you up by your wallet.” Time will tell whether those eccentrics who filled their crypto wallets were nuts. But in the competitive world of tomorrow’s financial crisis, we should choose and keep our wallets wisely.
Article Produced By
Heiko Closhen, Entrepreneur