As Bitcoin, Ethereum, and a host of altcoins continue to grab the headlines of every financial tabloid week in and week out, cryptocurrency has understandably become an unavoidable topic in everyone's day-to-day conversation. Students and housewives with no previous knowledge or experience in finance join professional investors and corporate bankers in asking one question: why?
More specifically, Why, out of all the good things that exist in the universe, did the market choose cryptocurrency to be its newest and latest chart-buster? What are the key benefits of cryptocurrency that make it so special?
In order to understand the benefits of cryptocurrency, it helps to have some basic knowledge about a revolutionary invention called blockchain technology.
In short, blockchain technology is the bedrock and foundation of cryptocurrency. The idea is that many computers and servers all across the world would work together (using mathematics and cryptography) to form a network that stores, records, and verify data regarding transactions.
What this creates is a completely decentralized and digital method of transaction that is purely peer-to-peer and does not require approval from an external source of authority (such as a central bank or other financial entities).
To give an example, a Bitcoin user does not have to travel to a bank or store to buy a product. Instead, they are able to make purchases by transferring individual units of Bitcoin directly (without any banks or third parties involved) to the selling party via its network. Apart from minimizing transaction costs, this also creates numerous benefits for using cryptocurrency over traditional fiat money, such as:
One of the key benefits of using cryptocurrency is how easy one can make transactions or transfer assets. Before cryptocurrency, doing business with physical money often involved a series of intermediaries such as banks, lawyers or legal representatives, institutions, as well as a ton of legal documents, records, and paperwork. This could accumulate to a huge amount of time and monetary costs for both parties depending on the scope of the transaction.
Using cryptocurrency, on the other hand, is very cost-effective because each transaction takes place on a secure network that allows the trade to happen directly between two parties, and completely removes the need for the middle person.
When someone who uses cryptocurrency needs to transfer their assets to an associate in another country, they simply make the transaction through the network, get the transaction recorded in a blockchain, and the recipient can receive the transfer very quickly.
There is no need to go to a traditional Money Transfer Operator (such as Western Union), where they would have to go through a series of documents, pay for expensive fees and taxes, and wait for up to days for the involving banks and operators to confirm the transaction and put money to the recipient's account.
This decentralized aspect of using cryptocurrencies also means there are fewer restrictions compared to traditional money transactions. One example of this is you can make transactions on the network any time of the year without having to compromise with bank holidays and working hours. Perks like these are game-changers for businesses in the age of the global economy, where cross-border and international transactions are becoming more and more prevalent.
Unlike physical currency, cryptocurrencies like Bitcoin are decentralized - they are not issued by any central bank or governmental bodies, and their value and distribution can not be easily manipulated by these organizations. Theoretically, this guarantees more autonomy for its users than traditional money printed by banks and governments as the value of each individual unit of each coin is less susceptible to devaluation caused by bank crashes and specific government policies.
Although the crypto market has a reputation of being very volatile, those who use cryptocurrency could potentially have better protection of their wealth when the country they live in is affected by financial and political turmoil. This could be situations like when a government is saddled with huge debts or face economic sanctions.
In addition, unlike physical money, which can be printed by the government and banks, cryptocurrencies such as Bitcoin have a limited quantity and can not be mined beyond that ceiling. This, in turn, will increase and sustain demand in the long run and protect Bitcoin from the same kind of devaluation caused by inflation experienced by traditional currency.
Having the luxury of blockchain technology means that cryptocurrencies benefit from a level of security unmatched by any existing form of electronic transactions.
As mentioned earlier, crypto transactions take place on a public network and are recorded and authenticated by a distributed ledger through complicated mathematical puzzles (cryptography). The encrypted data is simultaneously distributed among millions of computers worldwide and is virtually impossible for anyone to forge or manipulate.
For someone who wants to forge a single unit of Bitcoin or Ethereum, they would have to take control of over 50% of the computers in the gigantic network in order to beat its consensus mechanism. While banknotes, cheques, credit and debit cards, and even bank accounts can be forged, stolen, and replicated by criminals, cryptocurrency benefits from an unparalleled level of security that is very difficult to outmaneuver, at least for the near future.
If there is one single reason why you should use cryptocurrency, then that would be its tremendous potential as an investment. In case you haven't noticed already, the price of a single Bitcoin has gone from US$1 in 2011 to over US$45,000 in 2021. Similar trends could be found across the entire crypto sector, as Ethereum, Cardano, and many other cryptocurrencies have seen exponential growth in price since their initial release.
As cryptocurrencies continue to gain widespread attention and become more commonly used in everyday transactions, many experts speculate that prices could still increase due to higher demand in the coming years. This, along with the rapid growth of cryptocurrency over the past ten years, has attracted millions of investors across the globe to participate in its speculation. Such a high influx of volume and capital has created a market that is relatively volatile but highly profitable for traders who are willing to take a risk.
For this reason alone, millions around the world have begun using cryptocurrency as a form of investment, as even a small position today could potentially bring huge returns in the future.
If cryptocurrency offers so many benefits, why hasn't it replaced traditional currency yet? Is there anyone who actually uses cryptocurrency in their day-to-day transactions?
While it is still an uncommon practice to pay for your lunch at a restaurant using cryptocurrency, things could all change very quickly if crypto continues to grow at its current pace.
Since 2019, Bitcoin alone accounts for $6 billion of daily online transactions and is already the third most popular payment network in the world, only behind Visa and Mastercard. Every year, thousands of new businesses spring up in order to capitalize on the growing success of crypto-related products and services. More and more companies like Tesla will soon use cryptocurrency as a form of payment, while others like Facebook are looking to release their own digital coins.
A recent study also shows that cryptocurrency benefits businesses by providing access to a new group of customers that are more willing to spend. Prospects like this and the many security and cost benefits cryptocurrency already offers will soon be too attractive for most businesses in the world to ignore.
As using cryptocurrency becomes more and more prevalent in today's business world, a brand new host of career and investment opportunities have emerged. If you want to become an expert on cryptocurrency and get a head start on these opportunities, then the Blitz Broker Training Program will be your best place to start.
While completely free of charge, our course covers all aspects of cryptocurrency, from the mechanics of blockchain all the way to the technicalities of making actual investments. Successful graduates will also be eligible to take an exam and receive certification to become a crypto broker in Blitz's global network. Visit our website or talk to our team to sign up for free or learn more about our program now.