“The world is struggling with one of the largest pandemics in its history and like with every struggle, raises a financial struggle that is ignited by the growing inflation and losses to the society. History has shown that the traditional financial system falls short of what is required for the quick recovery from such disasters and fails against inflation. Thus cryptocurrencies are the new weapon that acts as a hedge against this inflation and need of the hour in the war against this financial struggle”.
What are Cryptocurrencies?
In layman’s terms the cryptocurrencies can be understood as digital money that can and only exists electronically. The sole existence of the cryptocurrencies was ignited due to the existence of various pain points with the usage of physical notes and the traditional system of money.
The most problematic concept of the traditional financial system is its centralization or the control over money by a central authority and it is this pain point that led to the creation of bitcoin and other cryptocurrencies. The cryptocurrencies act as decentralized means of money exchange that is achieved in a peer to peer manner and is instantaneous in nature. The cryptocurrencies have broken the border barriers in money exchange and has provided a global currency to the world.
To understand why cryptocurrencies are being sort globally, we must understand the four major benefits of cryptocurrencies.
Benefits of Cryptocurrencies
There is a need of analyzing 4 major benefits of the cryptocurrency space and these includes
Medium for quick and cheap transactions
Without the presence of a third party intermediary as in the traditional banking system, the cryptocurrencies can be sent between the two parties quickly and without any brokerage fees. This makes the process more simple and hassle free.
The tedious process of the banking system and creation of a bank account has restricted over 7 billion individuals from creating a bank account. Cryptocurrencies provide a quick mechanism of wallet creation and fast payment and that creates an opportunity for such individuals to obtain financial freedom in terms of handling their finances.
Secured and Confidential Transactions
The cryptocurrency transactions are completely encrypted and anonymous, making them extremely secure means of transferring money. Nobody other than the users can track the transaction thus ensuring the utmost security and integrity of the transactions.
Growing investment Opportunity
The cryptocurrency as an investment opportunity has grown so rapidly and unlike any other asset class in the history of investing. With adoption of the cryptocurrency space in its cradle and a market cap of over $2 Trillion at the time of writing, the future of the investments in this asset class is brighter than any. With the entry of the institutional investors into the crypto space the expansion of the industry is inevitable.
- The cryptocurrencies are the future of finance as they provide cheap, fast and confidential transfer of value.
- The benefits of cryptocurrencies over the traditional financial system have led to its mass adoption and expansion as an industry.
Disclaimer: The article is meant for the educational purpose only and in no way it should be considered as financial advice. Own research on the topic is advisable.
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