Some Monetary And AI Aspects Of Cryptocurrencies

Abstract

With the emergence of cryptocurrencies, the question of the role and importance of cryptocurrencies in the payment systems and monetary functions of cryptocurrencies was raised. In this short discussion, we look at the importance of cryptocurrencies from the aspect of conventional functions that fiat money has in modern economies. One of the key advantages of cryptocurrency that is insisted upon is the decentralization of its creation. The decentralization of the money creation process negates the controlling role of central banks, which is of key importance for the functioning and stability of the monetary system based on fiat money and protection of the financial system as a whole, protection of consumers and the general public. Starting from the traditional functions of money, we consider which of these functions cryptocurrencies currently perform successfully. In this context, starting from the textbook definitions of money in the practices of some central banks, we try to determine the place of this new form of money in the context of definitions of money and its substitutes. Cryptocurrencies do not fit into the classic or standard definitions of money and its functions. After the gold standard system, it is hard to imagine any new form of money or monetary system that would not be controlled by central banks. The emergence of Bitcoin, "blockchain" and "cryptocurrencies" to many observers, this high-tech financial innovation beggars belief that it is possible to create conditions for the creation of innovative democratic monetary instruments. The achieved popularity of cryptocurrencies raises the question of whether these innovative financial instruments can replace the classic money provided by central banks. At the very start, the problem of using these currencies in everyday payment processes performed by households arises. The current characteristics and dynamics of the cryptocurrency market and the comparison of their characteristics in relation to fiat money cause skepticism regarding the possibility that these currencies will replace standard monetary systems in the foreseeable future. It seems that the expectations regarding cryptocurrencies are exaggerated. Cryptocurrencies have increasingly become very attractive investment assets in recent years. Their role as a means of payment comes into the background. The development of artificial intelligence corresponds with the growth and use of cryptocurrencies. Due to its new possibilities, artificial intelligence is becoming a very powerful tool in the hands of investors who can now manage their investments more easily and efficiently. This is especially important when it comes to cryptocurrencies whose market value is extremely volatile.