Today, cryptocurrencies and the blockchain technology are the main news headlines. In fact, the cryptocurrency industry is among the major trends of the investments sector in this modern era. There are enough reasons to herald cryptocurrencies that no one can afford to ignore.
The Blockchain technology is the core technology behind the cryptocurrency industry. Since the blockchain technology was introduced in the market, it has intensely changed how the world functions primarily in the finance industry. Just by listening and reading the news about cryptocurrency, you will understand the extent of change that it has brought both to individuals, investors, and the society.
For instance, over the years, we have read reports on Bitcoin price gains with over 10,000% returns. It’s indeed clear that cryptocurrencies are expected to bring a considerable change in the real economy. In fact, some bankers, economist, and other experts in the financial sector are already declared cryptocurrency as something that should be observed with caution in the society.
Cryptocurrencies are disrupting the way of life around the world in a number of ways. Here are a few;
Many economies depend heavily on oversea workforce for growth, especially, in developing countries. Currently, we use banks to facilitate the transfer of money from overseas. However, bank money transfer only forces you to dig dipper in your pockets in order to pay for processing and transactional fees. Coinbase is among the best cryptocurrency exchange platforms that facilitate the transfer of money.
In addition, sometimes it may take up to seven business days for forex flows to be processed in many countries. This is not the case with cryptocurrencies. Cryptocurrencies, for instance, Bitcoin, facilitates a faster and transactional fee-free money transfer all over the world. Also, when using cryptocurrencies, you avoid currency conversions which are also quite costly.
By cutting out middlemen such as banks in the chain, cryptocurrencies are bringing a significant impact on the global transfers and payments. International workers, businesses, and organizations can now get access to a better and convenient means to send and receive money. It will save money and time which is essential for development.
The global economy mainly depends on the U.S Dollar as the reserve currency. In fact, all financial players in the entire world are determined by the U.S market. But we all know that currencies are vulnerable to fluctuations. Therefore, in the case of the U.S currency value changes, the change will be felt all over the world.
Cryptocurrencies are also being accepted widely as a method of payment. For instance, many online and offline companies have embraced Bitcoin as a way of payment. It’s now clear that we can no longer depend on the most famous and accepted currencies such as the U.S Dollar for payments.
With cryptocurrencies in the industry, this dominance enjoyed by the U.S Dollar can be avoided. Cryptocurrencies have introduced a decentralized system of all financial transactions. Therefore, a great change is expected especially in sectors such as international trade, foreign exchange, and diplomacy. Just look at the major crypto telegram signals to understand more on how cryptocurrencies work internationally.
Before the cryptocurrencies emerged in the financial industry, any kind of monetary transaction was regulated directly or indirectly by the central banks. With Bitcoin any other cryptocurrencies in place, this is no longer the case. The system of cryptocurrency is decentralized, meaning that no one, either governments or central banks are controlling the funds.
Cryptocurrencies have brought change in the economic, financial structure, taking away power and control from governments and institutions and creating a self-dependent body to facilitate financial transactions.
Cryptocurrencies have widely led to the development of new markets. For instance, Bitcoin and Ethereum, which are the most famous cryptocurrencies today, have opened doors to new markets. New opportunities have replaced some old techniques on how financial transactions are controlled.
In the Bitcoin system, we have miners who verify all the transactions in the system and in return get a reward for their efforts. Also, the fact that no one control these systems give people confidence and it’s expected that such markets are expected to rise over the traditional markets.
We should not forget about the negative changes that come along with cryptocurrencies. The kind of technology used with cryptocurrencies hinds the identity of the user. And with no government or banks to follow up and inspect such transaction, more illegal activities are expected.
The freedom of hidden user identity can allow illegal businesses to take place. For instance, terrorists can fund, buy, and sell weapons and other illegal stuff without revealing their identities.
We shouldn’t forget about the major challenges facing the cryptocurrency sector. Each day we come across news of theft especially through activities such as hacking. There are a lot of people who have benefitted by investing in cryptocurrencies. On the other hand, more people have also lost millions of cash in the same business.
We have witnessed major cryptocurrency platform losing money due to hacking. For instance, a reputable cryptocurrency exchange called Poloniex was once hacked. Also, individual online wallets are also vulnerable to theft through hacking and scams.
Even though we can say that cryptocurrency will bring a positive change in the economy, we should also be cautious. We should look out for spooky activities too and implement ways on how we can avoid them.
One factor you should understand is that cryptocurrencies don’t have a physical form such as gold. It’s just math and virtual, and it is vulnerable to change. Also, in case you lose your account information, there is no one to help you, and you may end up losing your coins.
Also, once a transaction is completed, it cannot be reversed. This makes the traditional banks and financial institutions better since you can follow up in case of a situation. In such a case, cryptocurrencies can be flagged as risky.
In summary, it’s clear that cryptocurrencies are not perfect but will undoubtedly bring change and improvements to our current payment systems. We can certainly see a better future with cryptocurrencies.
As rapidly as the digital economy grows, adoption of cryptocurrency will gradually become the norm. This is because it will significantly improve how people live and do business.