Decentralized currency such as Bitcoin has been a hot topic in recent years, for a good reason. Hard work and frustration are usually involved in making money. The thought of its value being manipulated by governments worldwide is understandably unbecoming.
You’ve heard about the windfalls and sufferings of people investing in cryptocurrencies.
If you’ve been on the fence, keep reading to learn four reasons why digital decentralized currency is the future.
Leave My Money Alone
The global housing market boom, increase in rent, and wages staying as low as they are, have caused a massive upset in people worldwide.
It seems that there are no limits to the government’s tools to manipulate your hard-earned cash. If they print more money, your currency value will fall. If interest rates change again, your currency value will fluctuate.
What happens when the vacation you’ve planned for the past year becomes unaffordable because of the exchange rate?
Decentralized currency has the benefit of not being manipulated. There will never be more than 21 Bitcoin in circulation, and its value is set by the market, not by the government.
Power to the People
Because cryptocurrencies do not belong to any individual country, the control belongs to the people who use them. It all boils down to traditional supply and demand.
The more demand for decentralized currency there is, the higher the price will be. It’s truly a global currency that has no border limitations.
In the past, a global economy wasn’t something that ordinary people could ever fathom. If you had a small business, it was generally local. Nowadays, you could run a small online shop from your spare bedroom in the middle of Nebraska and ship your products to Korea.
Decentralized currency reduces the limitations set in place by governments. This makes international business much more accessible.
Transparent and Verifiable
Funding for blockchain companies in 2020 has more than doubled since 2017. The popularity of cryptocurrencies like Bitcoin has demonstrated the value of the tech behind them.
When the verifiable transaction data is run through decentralized platforms that require no central supervision, it makes it resistant to fraud.
A Better Alternative
El Salvador has made its way into history books by being the first country to adopt a decentralized currency as legal tender. And it’s just the start. In the U.S., hundreds of banks are also looking to allow their customers to buy, hold, and sell Bitcoin in their accounts.
There have already been many Bitcoin ATMs popping up around the U.S., and it shows no sign of slowing. The reasons to learn more about decentralized currencies are staggering.
Even in countries like Venezuela, where it isn’t officially legal tender, people are taking to storing their money in crypto. The country’s notorious hyperinflation has its currency practically valueless.
Traditional methods of transferring money, such as through Western Union or banks, typically come with a hefty transaction fee. Using decentralized currency avoids unnecessary costs and obstacles. Especially when even a $4 transaction expense could be a person’s monthly wage.
The Next Step for Decentralized Currency
The benefits of decentralized currency are realized by businesses today. Large financial firms, such as Bank of America, have already allowed some of their clients to trade bitcoin futures. The world will surely see more demand for its use as an alternative to centralized currency as time goes on.
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The Future of Cryptocurrency
Some economic analysts predict a big change in crypto is forthcoming as institutional money enters the market. Moreover, there is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies. Some predict that all that crypto needs is a verified exchange traded fund (ETF). An ETF would definitely make it easier for people to invest in Bitcoin, but there still needs to be the demand to want to invest in crypto, which might not automatically be generated with a fund.
Conclusion
The emergence of Bitcoin has sparked a debate about its future and that of other cryptocurrencies. Despite Bitcoin’s recent issues, its success since its 2009 launch has inspired the creation of alternative cryptocurrencies such as Etherium, Litecoin, and Ripple. A cryptocurrency that aspires to become part of the mainstream financial system would have to satisfy very divergent criteria. While that possibility looks remote, there is little doubt that Bitcoin’s success or failure in dealing with the challenges it faces may determine the fortunes of other cryptocurrencies in the years ahead.
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