A long time ago people used to exchange things they have for the things they need. Now, however, is a different story. Be it to buy your favorite snacks, a game console or to pay your electricity bills, we exchange the things we have or need with money. But change is constant, who can guarantee it is going to be the same way in the future? We surely can’t. More so because we already have a better alternative for money emerging- cryptocurrency.
What is Cryptocurrency?
Like money, cryptocurrency is also a medium of exchange for goods and services. However, it is an encrypted and decentralized virtual currency that can be exchanged over the internet. The difference is, money is a legal tender in all countries, meaning no one can refuse the money but cryptocurrency can be refused as a medium of exchange. But with El Salvador being the first to make Bitcoin a legal tender, how far can cryptocurrency be from being legal tenders in other countries and standing on equal footing with money?
Why is Cryptocurrency the Future?
With cryptocurrency being a virtual decentralized currency comes a lot of benefits. It makes transactions a lot easier and more secure with the following.
It is decentralized: Currently, most transactions take place using fiat currencies, which can be controlled by the government to manage the credit supply, liquidity, etc. However, decentralized currency is not controlled by any organization which means its worth cannot be determined by any kind of organization and it is monopoly-free. Decentralized currencies are also free from inflation and deflation, so the value of the currency is maintained.
No involvement of third parties: Cryptocurrency is a peer-to-peer medium of exchange. There is no need for any third parties like PayPal for transactions. This eliminates the usual risks in a transaction. A user is also needed to pay little to no amount of transfer fee this way.
Confidential transfers: There are no limits on the purchase or withdrawal for transactions with cryptocurrency. You can make a transaction anytime, anywhere, but your transaction details will be kept extremely private. The transactions are a unique peer-to-peer exchange without anything extra involved limiting the risks of thefts or fraud.
Easier Foreign Trade: Usually international transactions take a lot of time and formalities due to the various laws in different countries. Cryptocurrencies are exchanged over the internet and pay no heed to the border or international transactions. This allows an individual to complete an international transaction that would have usually been a hard task, the least possible time with little to no difficulty at all.
Security with Blockchain Technology: Data in a blockchain cannot be tampered with, destroyed, or imitated, making the ownership of that specific data exclusive to an individual. This makes transactions between two distrustful parties safe and secure.
Jennifer, an expert at Financial Accounting Assignment Help says, “Like any other currency, cryptocurrency has its drawbacks, like issues with cybersecurity, illegal activities, and risk of data loss. However, considering all the benefits cryptocurrency has over money, we can’t help but imagine it is the currency of the future.”
What are the cryptocurrencies that are currently popular?
- Bitcoin: Hearing about cryptocurrencies, Bitcoin is what comes to mind. That is the reason for being the first on the list. It was created in 2009 and is now hugely recognized throughout the world. Bitcoin was the start of the cryptocurrency revolution.
- Ethereum: Ethereum is an alternative to Bitcoin, but it has its differences. It allows its users to use Ether, the Ethereum currency, as a medium of exchange and to use, create, publish, and monetize applications within the network. There is no limit to the number of Ethers that can be created.
- Dogecoin: Dogecoin was initially launched in 2013 as a joke over Bitcoin but has gained huge recognition since. It uses similar blockchain technology but has no limit over the number of coins that can be mined.
The Takeaway
Cryptocurrency transactions are fast, virtual, encrypted, and global. These traits of cryptocurrency make life a lot easier. With the way cryptocurrency has already been changing the world, it is not hard to believe that it is the future. This only means the cryptocurrency industry has a lot of opportunities to come. Learning more about it now can mean an advantage in the future. Grasp this opportunity now.
