Cryptocurrency is becoming a more popular word and topic of conversation worldwide. If you’re new to joining the conversation about cryptocurrency you may not understand the basic principles or what all of the fuss is about it. Cryptocurrency will not only change the world it will make the world a better place in a lot of different ways.
A cryptocurrency is a form of digital money that is stored and transferred electronically. The backbone of what powers cryptocurrency is blockchain technology. Blockchain technology keeps a record of every transaction and stores this information on a digital ledger. This way no transaction can be reversed changed or altered in any way.
This ledger is available for everyone who is on the blockchain, so there is 100% transparency with every transaction. Blockchain technology is decentralized, so this means that a central authority does not power the control of the network. A lot of different users maintain the network. They are called miners. They can verify and execute transactions.
Bitcoin is currently the most well-known cryptocurrency in the world. Ethereum (ETH) is also well-known and is arguably the second most well-known cryptocurrency. However, there are approximately 1,658 different types of cryptocurrencies available for use today.
Not every cryptocurrency serves the same purpose, some are for general use, while others serve different industries and some solve various problems.
Cryptocurrency may seem like a futuristic technology if you are just now joining the conversation, but Bitcoin, the first cryptocurrency has been in existence since 2009. It has already revolutionized the way money is stored and transferred. It has also changed how we pay for goods and services and do business internationally.
Top 4 Reasons Cryptocurrency Will Make the World a Better Place
- Reduce Fraudulent Transactions
Fraud is always a significant concern with anything related to money. Credit Card Fraud and Identity Theft are two huge problems that aren’t going away anytime soon. Every day new people become victims of fraud, and every time you make any monetary transaction. Visa reported that they process 1,667 transactions per second. That is a lot of transactions for hackers to intercept.
With cryptocurrency, there aren’t any bank accounts or credit cards. Also, every transaction is encrypted permanently on the blockchain. This information is unalterable. Due to the heavy encryption, this makes the blockchain extremely difficult for anyone to hack. This technology will play a huge role in protecting people from being victims of fraud. You can also store your crypto wallet information offline to have even more security.
- Encourage Crowdfunding
The traditional way entrepreneurs raise capital is going to venture capitalists and angel investors and ask for a substantial investment so they can grow their business. However, there are a lot of drawbacks to this traditional model because not everyone has access to Venture Capitalists. A way to curtail this conventional route of funding is crowdfunding.
Crowdfunding allows a large number of investors to make small investments in different ventures. The numerous small investments mitigate risks, gives everyone the chance to make a significant return on their investments and gives more entrepreneurs an opportunity to make their idea a reality.
Cryptocurrency has embraced crowdfunding with Initial Coin Offering (ICOs). ICOs are cryptocurrency based fundraising. The capital raised is then used for each venture as they scale.
- Simplify the Process of Transferring Money
When you want to send money to someone you need to go through a financial institution. The time required for these transactions to successfully execute significantly shortened over the years, but it still can take up to a week for funds to clear in an account. You also then have to pay the financial institution a fee for the transaction. The costs associated with transferring money can add up quickly especially with foreign transfers.
Cryptocurrency eliminates the necessity of a third party to carry-out a money transfer transaction. If you want to transfer money to a friend you can send it to them instantly and directly through the blockchain. This technology is convenient especially if you need to transfer money to someone in a different country that uses a different currency.
There are currently 180 different fiat currencies in circulation worldwide. With cryptocurrency, there is one universal currency, so there is no need to go through a currency exchange on top of the transfer. Since everything is direct, there are no fees associated with transferring cryptocurrency, and the blockchain records every transaction.
- Strengthen E-commerce
In 2017 e-commerce accounted for 13% of all retail sales in the United States. E-commerce also experienced 16% growth rate in 2017 from 2016. E-commerce is becoming more and more convenient every day. It would grow even faster if it there weren’t concerns about fraud. The fear of fraud is preventing some consumers from participating in the e-commerce market.
Cryptocurrency will reduce the risk of fraud for consumers. It would also lower the risk of fraud for vendors. Every transaction would be recorded on the blockchain and not reversible.
There are a lot of ways cryptocurrency will improve our lives in our not so distant future, but those are the top four reasons cryptocurrency will make a positive difference in the world. It won’t be long before we experience all four of those benefits as cryptocurrency is adopted by more and more people worldwide.
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