Not too long ago, cryptos were greeted with a lot of skepticism. Even when Bitcoin hit a temporary high in 2017, people criticized the market to be volatile and unreliable. However, cryptocurrencies have only gone up ever since. The criticism ditched at them has died down and has been replaced with a more optimistic aura of hope surrounding the opportunities they host.
On the one hand, there’s a rather traditional school of thought that sees cryptocurrencies as the death of managed and regulated currency standards. This school of thought believes that cryptocurrencies are nothing but a financial medium for terrorists, criminals, and fraudsters to fund their operations, without being tracked. The criticism is fueled by the involvement of crypto trades in the Dark Web and ransomware scams.
However, on the contrary, there’s another school of thought that admires cryptocurrencies for their convenience, secure trading and return on investment. The positive hype surrounding blockchain technology and the increase in recent crypto returns have gone in favor of this group.
In this article, we will take a detailed look at the benefits of cryptocurrency in the digital economy, and how these benefits make them a more workable and convenient alternative to traditional options.
Faster and Clearer Transactions
In traditional business dealings, there are many legal representatives, brokers and agents that can increase the complications and expenses of what should have been a simple transaction. There are brokerage fees, commissions, paperwork and several other responsibilities and expenses that have to be met for appropriate results.
Perhaps one of the biggest USPs or unique selling points of cryptocurrencies is the ability to offer a peer to peer connection, without the presence of a middle man or organization. There is hence greater clarity in the transaction, with better accountability of who is required to pay whom. The two parties in the transaction are directly connected.
Under the cash or credit system of today, there is no confidentiality involved. Your entire transaction and financial history are up for credit agencies and banks to scour through. Every time you make a transaction, possible stakeholders linked to the bank are notified. At the simplest level, credit agencies might peak into your accounts from time to time to verify just how much is in there. For more critical business transactions or financial interactions, a more thorough record of your financial history will be required, and the understanding will be based on that.
Cryptocurrencies, on the other hand, make each transaction a unique one, the terms of which are entirely confidential. This model guards your financial history and protects you from identifying theft and other threats of the sort.
You have probably gone through your account statements and looked in shock at the heavy fee imposed on transferring funds, writing checks, creating pay orders or even just breathing within the vicinity of a finance center. Transaction fee takes a major bite out of your total finances, especially if you’re earning a limited amount.
Data miners in the crypto world do the bulk of the number crunching and background work in return for compensation from the cryptocurrency itself. Hence, the involved parties in the transactions have to pay nothing in the name of fee.
Better Access to Credit
Both, Internet and digital data transfer mediums, are facilitating the interest and exchange in cryptocurrencies. These services are hence available to anyone with a data connection, some knowledge of the crypto world and the ability to access relevant portals, wallets and websites. It is estimated that there are over 2.2 billion individuals in the world with access to the internet, but no access to a traditional exchange or banking systems. The cryptocurrency market hence holds an edge over traditional forms of asset transfer, as it gives everyone the ability to be part of the network.
Easier Trading Options
Judging by the speed at which the world is adapting to the data revolution, cryptocurrencies will soon facilitate international trade and make it easier than before. While they aren’t currently recognized as a legal tender for trade, cryptocurrencies by their very nature aren’t subject to any fluctuations. This means that factors such as interest rates, exchange rates, levies and other transaction charges imposed by different countries won’t impact cryptos. Also, cross border transactions can be made easier through the peer-to-peer mechanism of cryptocurrencies.
Once a cryptocurrency transfer is authorized, it cannot be reversed or changed by anyone. This goes against the ‘charge-back’ case in place by many credit card companies. This policy works as a hedge against possible fraud that can result due to mistakes in the return policy or other requests for refunds. The strong security is achieved through the distributed blockchain ledger and protects against account tampering and forms of fraud.
In the traditional banking system, stewardship of your funds is handed over to third party financial institutions. These institutions practice their power over your funds and can close accounts without notice. The reasons given for closure can signal around infringements of financial terms of service. This may impact you as the owner of the account and require you to jump through multiple obstacles to regain access to your accounts.
Perhaps the biggest benefit of cryptocurrencies in the digital economy is their ability to appoint you as the sole owner of the public encryption keys making up your cryptocurrency address or network identity. You can delegate the management of your wallet to a third party, but that’s your choice.
Cryptocurrencies offer a trading option for the future with ultimate control in your hands. Users get faster and securer global transactions without the fees that characterize our current systems. When used and implemented properly, cryptocurrencies can be the harbinger of many future technologies.