In 2008 the first digital currencies emerged in the form of Bitcoins. At first, it was a novelty and few really took it seriously. This was evident in its reception to the global economy. Although many people bought up the currency it still didn’t fare well in the markets and was considered volatile for several years. Only in 2017 did cryptocurrency become more valid and realistic.
Ever since this time cryptocurrency has been growing in popularity and value. More and more currencies are coming online and people are beginning to earn salaries in this digital money. It seems that cryptocurrency is now a realistic monetary future for many people and it isn’t hard to see why. The advantages range from better security to cheaper and more ethical transactions. Read on to find out more.
Fraud
Fraud is a big issue in the world of digital transactions. Banks and credit card companies worldwide invest millions annually attempting to keep their customer’s personal details safe as well as their online transactions. It’s a game of cat and mouse with fraudsters always attempting to outfox the latest security measures. That is not something digital currencies such as Bitcoin needs to worry about.
Cryptocurrency is set up using a blockchain. A blockchain is a digital security system that uses a series of security measures including a consensus on what blocks are valid on the chain – it is virtually impossible to be tampered with. This means that users can confidently transact cryptocurrencies online without the need for extensive and inconvenient security protocol.
Immediate Settlement
When buying a property in an offline environment there are several things to consider. You need a broker, a lender, a notary, a surveyor, a lawyer, and so on. The property requires many third-party services to ensure that everything is above board and legal. This makes sense, but when operating a blockchain there is less security and validation needed which is another advantage of cryptocurrency.
Not all property sales will be eligible for cryptocurrency, but for those that are, the process is far simpler and requires fewer third party services- if any. Since a blockchain is also a property rights database it can act as a security protocol eliminating the need for lawyers and notaries. If you want to buy property using cryptocurrency you can do so with less stress and less effort.
Lower Fees
Traditional currencies are weighed down with transaction fees and inefficiencies that are the result of operating across borders and through banks. If you want to send money to Vietnam, for instance, it may have to go through several different banks at both national and local levels. This takes time, incurs charges, and increases the likelihood of fraud. All this is eliminated with cryptocurrency.
Cryptocurrency like Bitcoin is a fully digital currency that is exchanged between vendors via the blockchain. It is a ‘push’ currency rather than a ‘pull’ currency like credit cards, meaning that the money paid to a merchant is the exact amount required. There are zero fees for the transaction If you want to send money to Indonesia, for instance. However, if you want to convert crypto to fiat currency you may have to pay a fee through a platform like Coinbase.
Access to Everyone
Conventional currencies have many drawbacks, so many in fact it’s a wonder that cryptocurrency was not developed sooner. One of the disadvantages of physical cash is the process of inflation and the lack of access to certain geo-specific areas have to money with value. Cryptocurrency has the potential to revolutionize certain poorer areas through its tremendous access, value, and stability.
Over 2 billion people globally might qualify as having poor access to funds but good access to Internet services. This makes it possible for them to invest in bitcoin money and increase their quality of life. There are now supporting technologies coming into production, such as phone-based money transfer systems, and microfinancing systems to help facilitate this access to digital cash.
Decentralization
One of the main characteristics of the monetary economy is the centralization of cash within a nation-state. This cash is usually controlled by the central bank and tied to reserves of gold or silver. The true value of the nation’s economy is based on these reserves. Cryptocurrency is different and perhaps more progressive.
Firstly it is not backed by governments and its value is not tied to any reserve. Unlike centralized money that often prints money to ease economic hardship but encounters inflation, bitcoin is deflationary. Scarcity is one of the things that create value in an item and bitcoin is a scarce resource – this is one reason it has value. It is also not subjective to inflation, no more bitcoin can be printed.
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