A cryptocurrency is an alternative to the conventional mediums of exchange that uses cryptography in the verification of asset transfers, minting of additional units, and in the securing of transactions. There are many examples of cryptocurrencies including Bitcoin, Ripple, Ethereum and the likes. Cryptocurrencies may one day become the medium of exchange of choice for people and businesses across the world. Here are some of the benefits that cryptocurrencies offer users:
#1. Security – Anonymity Through Random Public Keys (Handles/Aliases).
Cryptocurrencies are less susceptible to fraud. Firstly, they cannot be charged back unlike credit cards. Secondly, it is impossible to counterfeit cryptocurrencies, unlike paper money. Additionally, coding these digital currencies incorporates the use of strong encryption techniques. Consequently, they are foolproof.
#2. Speed of Wealth Transfer.
While transferring funds using most conventional methods may take weeks, transactions carried out using cryptocurrencies are typically complete in minutes. Cryptocurrencies may hold the key to providing immediate settlements.
#3. Low transaction fees.
Networks compensate those involved in the maintenance of the cryptocurrency transaction ledgers, therefore, there are no cryptocurrency transaction fees. However, most cryptocurrency users engage third-party service providers such as Coinbase in maintaining their wallets.
There are thousands of different cryptocurrencies in circulation today. This is a testament to their adaptable nature. Meanwhile, cryptocurrencies have several distinct uses. They may facilitate the streamlining of supply chain activities when used in the form of supply chain tokens. Privacy coins may help in masking one’s identity in the blockchain.
Cryptocurrencies are peer-to-peer digital currencies. Therefore transactions carried out using cryptocurrencies involve only two parties namely a sender and a recipient. While conventional currencies are centralized, cryptocurrencies have no central point for the processing of transactions.
#6. Universally recognized.
Cryptocurrencies are not held back by exchange rates which bog down international transfers and are therefore a convenient
method of sending money around the world.
#7. Individual ownership.
When depositing money into a bank account, one is giving the bank stewardship to the funds. The bank may choose to freeze or close the account at their discretion. However, with cryptocurrencies, both the public and private keys are held by an individual who happens to be the sole owner of the digital currency present in the wallet.
The word “cryptocurrency” is gaining ground every day. With so many people using them already and many more expressing interest in using them, it is hard to see why cryptocurrencies would not become popular. Surely, cryptocurrencies are a snapshot of our financial future.