The times are a changing and as we move into this new age of digital currency it’s important that we look into both the ups and the downs. Below we will flesh out and weigh up the points to both arguments.
While many people are still skeptical about the safety of cryptocurrency, it is important to remember that it is built on top of failsafe technology, blockchain. Blockchain records all transactions (anonymously) and this record cannot be altered or tampered with. This takes away the risk of fraud and identity theft, as can be experienced with fiat currency and credit cards.
Another important factor is that it is decentralised, meaning that it is not governed by an institution or government. This dissolves issues like inflation (although it is still subject to changing market prices), international transfer costs, interest rates, and transportation. As the currencies are digital, anyone in the world with access to the internet is able to partake in the market. This is particularly beneficial to countries, like Venezuela and Zimbabwe, currently suffering hyperinflation.
While many people still don’t understand what cryptocurrencies are, there are many companies that do not accept it as a form of payment. This is changing – see our article on 5 Impressive Ways Cryptocurrency Is Being Used Today – but not at a rate that makes it viable for everyone. Not understanding what cryptocurrencies are, generally manifests into thinking they are unsafe.
Another downside to digital currency is that once it is lost it is gone forever. You’ve heard the horror stories of people losing their coins, this is a real threat, and a strong lesson in the importance of storing your wallet / wallet key in a safe and traceable location. As mentioned above, cryptocurrencies are commodities, meaning they are subject to changing market prices.
As with anything one spends their money on, it is important to do your own research and make informed decisions. Cryptocurrencies have a long way to go before they are widely adopted as a sole tool for global commerce, but things are progressing, if the $130 billion market value is anything to go by. In closing, knowledge is power.
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