Are cryptocurrencies a sustainable alternative to traditional currencies?

Abstract

The great economic crisis has shown that the global financial system primarily protects those who are ,,too big to fail". In order to provide the common man at least a partial liberation from the hegemony of this bureaucratized and undemocratic system, Bitcoin was created, the first cryptocurrency that functions in a decentralized monetary system based on the blockchain. The emergence of cryptocurrencies, which are beyond the control of the traditional political and economic structures, has raised hopes that the world monetary system can be democratized and freed from the influence of inefficient regulatory institutions. This paper analyzes how realistic the scenario is that in the foreseeable future cryptocurrencies will prevail over traditional currencies, starting from the basic characteristics of cryptocurrencies, regulation of their accounting and tax status, mutual influence of monetary policy and cryptocurrency system, potential benefits that cryptocurrencies can offer to developing countries, as well as a summary of the advantages and disadvantages of cryptocurrencies and recommendations for their improvement.