The reason why cryptocurrencies are the future

Cryptocurrency is an ecosystem that’s growing day by day. There is widespread acceptance across the globe. It is also heading towards replacing the traditional financing system. The total number of users investing or owning cryptocurrencies is 66 million. This pertains to the past 1.5 years, between 2018 to end of 2020. Both private and public sectors are trying to legalize cryptocurrencies. Soon cryptos will become a legal payment system. This is yet another reason for the growing demand. Legalizing will pave way for investment options. Buying and selling will be easy and allow for value storage as well. Also, this swapping cryptos already came to mind  thru PancakeSwap.

History of cryptocurrency and its popularity

Cryptocurrency gained popularity with cryptography making digital advances. Different encryption techniques are used to ensure security. This made cryptocurrencies safe, reliable and an effective medium to undertake transactions. Currently, there are more than 5000+ crypto players in the market.

Cryptocurrency’s entry as an asset class: Thanks to the 2008 recession. Until 2008, only oil, currency, gold, and stocks were classified as an asset class. But none of the above were able to provide the required benefits to its investors. This is when crypto entered the market as an asset class. Crypto capitalized on this opportunity and generated $3 trillion during the recession season.

We have now understood why and how crypto entered the financial market. Let us also look at why these currencies could become the future.

Decentralized finance and its popularity: There is an obvious need for this. Enabling user’s with a transparent, hassle-free, and secure transaction system. The current financial system has failed to do so. Investors think that decentralized finance is secure and transparent.

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In the current financial system, the concept of decentralized finance has gained attention. This allows for a simple and easy solution to trade, buy, sell, and lend money. There is an increasing demand in several exchanges dealing with cryptocurrencies. Investors are on the lookout for credible exchanges enabling them to execute transactions.

 

Cryptocurrency and its many forms: Yes, it is true. Cryptocurrencies take many forms. Listed below are a few forms of cryptocurrency that add value to your holdings.

  • Payments: Cryptocurrencies are useful for transaction purposes. You can add cryptos to your wallet and use the same for buying and selling goods and services. There is no third party involved here to complete the transaction for you.
  • Investment: this is the popular way of holding cryptos. You keep investing in cryptos and the profits keep growing. When the total supply becomes limited, the existing demand increases. this increase creates a rippling effect on your investment.
  • Digital ownership: You do not need a bank account to buy and sell cryptos. People without access to traditional financial payment systems can open a crypto account.
  • Acceptable financial system: Both private and public sectors are showing interest in cryptocurrency. El Salvador became the first country to accept bitcoin payments. There is acceptance from institutions, corporate, and certain central banks. This acceptance also paves way for developing new regulations. Both old and new cryptocurrency players in the market need to adhere.

Accessibility: Yes, one reason for the growing demand for cryptocurrency is its accessibility. The technology utilized in cryptocurrency transactions evolves daily. This provides for increased security and a stronger financial system. Let us now understand the benefits of cryptocurrency transactions. The below is a comparison study to the traditional financing system.

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Security in every transaction: No technology can trace and identify cryptocurrency transactions. Executed under secured environment and provides a guarantee for 0% forgery. The financial records associated with these transactions may help in tracing.

Privacy to the transaction: Data protection at every stage until the transaction is complete. This is what cryptocurrency offers to its users. Any unauthorized person will not have access to the transaction history. The transaction is completed without any-one else involved. This model of payment is secure.

To conclude, it is evident that cryptos will replace the traditional financial system. The blockchain technology used by cryptos is one of the main reasons. There is an increasing acceptance. Leading market players like India and USA holds strong possession. Cryptos will make their way into the financial industry. A decade from now, cryptos will become an acceptable payment model globally.

Hi, I'm Raj Hirvate and I am a Tech Blogger from India. I like to post about technology and product reviews to the readers of my blog. Apart from blogging i'm a big Anime fan I Love Watching Naruto, One piece and Death Note.

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