With everything moving to the digital sphere, currency is also following suit. Even money is already going paperless, which is done through cryptocurrency. Ever since cryptocurrency was invented and launched, it has gained much traction not only in the financial sector, but also everywhere else in the world.
What is Cryptocurrency?
Cryptocurrency is a form of digital currency that is decentralized, with no financial or government institution interfering with it. It uses blockchain technology to record all transactions and ensure the security of the cryptocurrency. Among the various cryptocurrencies available today, Bitcoin is the first cryptocurrency that was created and launched in 2009. Ever since its inception, more and more people have become attracted to it, and more countries started adopting the use of cryptocurrency. Retailers from different countries are also starting to accept Bitcoin as an official form of payment. In just 10 years, cryptocurrency has taken the world by storm.
Why is Cryptocurrency the New Trend?
1. Security and Safety
One of the problems that cryptocurrency addresses is the security of currency. Foreign currency usually has the problem of being prone to counterfeit, fraud, and hacks. Because of this, many are concerned with the security of foreign currency and banks.
Whenever any kind of cryptocurrency is created, it is being recorded in a public ledger called the blockchain for everyone to see. The identity of each transaction is highly encrypted to protect the personal details of the person who performed the transaction. Since the system is the one pushing transactions, there is less risk of fraud.
Moreover, with the ledger open to the public, if someone tries to hack the system, they must be able to alter every record available in the public, which is impossible to do. Security in the blockchain technology is also encrypted in smart contracts, making it hard for someone else to access your digital wallet.
2. Quick and Convenient Money Transfers
In addition, another solution cryptocurrency provides is the ability to facilitate fast and less costly international fund transfers. All you need is a stable internet connection and a smart device, and you can instantly make transfers with cryptocurrency. Since there is no bank or any kind of financial institution overseeing it, there are no bank fees included in the transfer. If you compare it with foreign currency, foreign currency charges a lot for international transfers, and it also takes a while. Cryptocurrency solves that problem.
Another reason why cryptocurrency has gained traction is because it is also being eyed by many as a form of investment. If you take a look at the historical performance of Bitcoin, for example, you will see that the value just keeps going up despite the erratic movements of the price in the short-term charts. So, imagine, if you bought Bitcoin in 2009, you would have already been a millionaire by now. The price of Bitcoin has outpaced most kinds of investments.
Because of its legitimacy, there is already a cryptocurrency market that was created. In this market, you can trade cryptocurrency. If you want to try out trading, you can check out trading platforms like bitcoin-trader.info. Just do your research, and you can easily earn from trading various kinds of cryptocurrency.
4. Hedge Fund
Another feature that cryptocurrency offers is the ability to serve as a hedge fund, as one of its unique characteristics is its independence from economic situations, political matters, and monetary policies.
This means that if a recession happens affecting the economic situation of your country, the price of Bitcoin will not be affected. Moreover, if the government starts to announce or implement a monetary policy, cryptocurrency won’t be affected as well. If you want to protect your net worth, you would want to use cryptocurrency as a form of hedging for yourself.
5. Easy to Liquidate
Unlike properties or goods, cryptocurrency is an investment and hedge fund that is very easy to liquidate. This is because you can easily convert Bitcoin to your own currency or even use it to purchase many things. Some examples are:
- Etsy – Etsy stores sell products that are also usually found on Shopify, eBay, or Instagram. In this online platform, you can use Bitcoin as an official mode of payment to buy anything that you can find there.
- Newegg – On this online retailer website, you can buy lots of consumer electronics and computer hardware using cryptocurrency.
- Reeds – Did you know that you could also buy jewelry using cryptocurrency? You can do this with Reeds.
- Gyft – You may also purchase gift certificates from different stores using cryptocurrency. For example, Gyft allows you to buy gift certificates from iTunes, Target, Amazon, and Starbucks.
- De Louvois – This luxury marketplace allows the use of cryptocurrency to purchase luxury items such as art, real estate, wine—even a Lamborghini.
- Unicef – You can also use your cryptocurrency as a form of donation to a number of advocacies you support. Unicef, for example, accepts cryptocurrency as a form of donation as well.
- Destinia – With Destinia, cryptocurrency will support your jet-setter dreams. You can pay with cryptocurrency for your flight tickets with Destinia.
Unlike foreign currencies, which are tied to a bank, the decentralized nature of cryptocurrency makes it independent from banks, so not even a bank will know that that account is yours. You are the only one who will have access to your own account. Moreover, your cryptocurrency wallet is tied to specific keys or numbers. The owners of Bitcoin will not be identifiable, which also serves as a blanket of protection from identity theft.
Mainly, cryptocurrency is the new trend because it solves a lot of problems that our present currency has. With the technology and solutions that cryptocurrency provides to the current global situation, it has become a new trend. Many even claim that cryptocurrency is the currency of the future. If you want to join the bandwagon, read up and learn more about cryptocurrency so that you, too, can reap its benefits.