Before digital currency was even a thing, everyone linked possession with physical money. This meant that people could touch and count their money but the downside was they couldn’t keep it with them all the time.
Then out of nowhere emerged cryptocurrency. It is now one of the widely accepted forms of digital currency. Because of this, tangible financial sector is now intangible. What this means? No need of a central authority to manage finances.
So, what does crypto even have that traditional assets don’t? Hang back to know.
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Major Transitions from Physical Assets to Digital Wealth
It’s honestly impossible to document all the changes happening in the crypto market. However, five things have caught our attention, which include:
Investors Become Financially Independent
The major reason why people are running towards this asset is the freedom it offers. The currencies we used to have were controlled by banks or governments. But with crypto that’s not the case. Whoever buys the crypto has complete ownership over it and can use it however they want.
Cryptocurrencies are great for sending money with almost no fees. Because of this many businesses now use solutions like Litecoin payment gateway to facilitate their users online and even offline. This allows users to buy, sell, and exchange their digital assets without needing the help of any middleman.
Simplifies Global Transactions
Can you still recall the struggles in transferring money across borders? In the past making a single international transaction was as challenging as climbing a mountain. There was bank procedures, exchange platforms, heaps of paperwork, and not to mention the waiting time – it was a headache.
Thank God for cryptocurrency, and it is not the same anymore. Today you need only to press few buttons on your phone to send money to a friend who is on the other side of the world. No more banks, no more middlemen, no more worries. It is fast, concise, and how international transactions should be. That too with minimal transaction fees.
Opens Up More Opportunities
From day one of the introduction of cryptocurrencies they are fluctuating in nature. This volatile nature of cryptocurrency has made it an important means of investment. Users see crypto tokens as a way to grow their money.
Unlike traditional currencies whose value increases after several decades, prices of cryptocurrencies go up and down a lot. Though it also makes it risky to invest in new cryptocurrencies, this is what an investment means.
No Banking Barriers Whatsoever
Various underdeveloped regions of the world don’t have banking facilities. People there can’t open their bank accounts due to several reasons. Sometimes, banking facilities are too far from some parts of the countries that the people there cannot travel distances every time they have to make transactions.
Cryptocurrency has solved this by offering everything online. All people need now is a smartphone with an internet connection. And they can buy, sell, and receive digital currency anywhere using their device.
The Power of Decentralization
Now let me explain one of the most significant points of the crypto industry that is decentralization. Forget the middleman. In the case of cryptocurrencies, people can buy, sell, lend, or borrow assets through the internet without the authorization of some bank or any financial company. That’s freedom financial at its best.
And it doesn’t stop there. The use of blockchain technologies make it possible to conduct smart contract, which are agreements that execute automatically without the interference of human beings. Apps under DeFi (Decentralized Finance) goes a notch higher by providing the financial services to people who cannot afford the same. No middlemen, no restrictions, only opportunities making developers meet users and investors like never before.
Risks of Using Cryptocurrency
Yeah, nothing in life is perfect though, and the same issue applies to cryptocurrencies too. As it is already transforming the financial world, it’s just as making waves and generating its share of problems.
Traditional Views of Investment Risk
The traditional ways of investing in finance through prize bonds, stocks, and real estate were somewhat secure. Usually, these assets were backed up by the government. This meant that there was less risk as compared to the continuous fluctuations and volatility of the crypto market.
Centralization and Governance Risk
Mostly the blockchain and cryptocurrencies are decentralized in nature. But, there are no fixed policies regulating crypto projects. The developers try to make their projects successful by relying on the latest advancements and offering incentives to users. Sometimes, some malicious users or hackers might attack the network for their gain, causing the failure of projects.
Implementation of Taxes and Policies
Cryptocurrency is still a new term that many people don’t even know about. Until now there haven’t been many policies around it. Even if there were, Trump is all set to abolish all of them in one meeting.
There has been some regulatory uncertainty as many countries have completely banned its use while some allow it but only to the verified ones. Tax policies are still a few years ahead when people will actually understand its power.
Conclusion
Cryptocurrency has totally changed the way we used to think about money. In such little time, this industry has made a revolutionary impact in the world of finance. How? By making transactions way faster and more secure.
Many businesses now accept crypto as a payment method around the globe. However, there’s still much we need to know about this industry and how it will unfold in the next few years.
