Does Cryptocurrency Add Value to the Economy, or is It Just a Money Game?

Does Cryptocurrency Add Value to the Economy, or is It Just a Money Game?

Let’s first define what cryptocurrency is.

A cryptocurrency (virtual currency) is a secure digital asset that is impossible to forge due to its transaction histories. It is decentralized based on blockchain technology—a distributed record with an ingenious way of passing information in a fully automated and safe manner.

So, why do people go crazy over cryptocurrency? Does it really add value to the economy? Or is it just a speculative bubble?

Understanding Cryptocurrency

Bitcoin was the first cryptocurrency based on blockchain technology. And today, there are thousands of competing cryptocurrencies with various functions and specifications, these include Litecoin, Peercoin, Namecoin, Ethereum, Cardano, EOS, and many more. The aggregate value of all the cryptocurrencies is around $214 billion— wherein Bitcoin represents more than 68% of the total cost.

The question is: How does cryptocurrency help the global economy?

Cryptocurrency has been reviewed and debated for years by investors and finance professionals. Die-hard experts say that cryptocurrency serves as a financial tool that is accessible and useful. It can enable global, social, and economic growth and can offer more convenient access to funds and industrial services.

Moreover, cryptocurrency helps to build the future of the global market. It has created a noise ever since its prices suddenly surged. This has become a new trend in the world of investment for legitimate reasons, and people who made investments profited in incredible ways.

Here are the reasons why cryptocurrencies are valuable in the global market:

  1. The degree at which the growing cryptocurrency industry is earth-shattering. This is confirmed by users who became rich and found opportunities to thrive financially. Aside from that, cryptocurrency has permitted many people and businesses to expand and prosper. It has satisfied the financial needs of the users, as well as the economy.
  2. Cryptocurrencies can help in case of financial crises. More than one-third of the global population does not have access to banks. And because of this, they may be led to questionable and risky lending practices. This is where cryptocurrencies come into the picture. Many cryptocurrency apps and programs are accessible to users to facilitate a financial revolution that makes everyone more financially united, empowered, and equipped.
  3. Cryptocurrency is a low-cost means of transaction. Fund transfers have lower processing fees than banks and financial institutions. A financial institution like JPMorgan Chase (JPM) sees that cryptocurrency lowers transaction costs by streamlining payment processing.
  4. Cryptocurrencies are more private than others that it gives protection for whistleblowers or activists living under restrictive governments. There is no central authority or government to access your funds or personal information.
  5. Blockchain and cryptocurrency can help entrepreneurs receive payments in more currencies. It aims to help businesses get the best financial coverage with the rest of the world. Examples of these are BitPesa and TenX’s digital wallet. Entrepreneurs quickly convert altcoins into fiat currencies and redirect to business investments and payments.
  6. Cryptocurrency ensures that it has the safest and trusted digital platforms that makes investment valuable today and in the future. It is more comfortable to transfer directly between two parties without a trusted third party like a bank or credit card company.

However, some will always have something negative to say about the success of cryptocurrency.

Drawbacks and Criticisms

  • The nature of cryptocurrency transactions is well-suited for illegal activities like money laundering and tax evasion.
  • Market prices are based on demand and supply activities.
  • The exchange rate for another currency can fluctuate widely.
  • The design of cryptocurrency assures a high degree of scarcity.
  • Cryptocurrency is considered by some economists to be a short-lived fad.
  • Exchanges and wallets are immune to hacking because several online transactions have been the subject of hacking and theft before.

Nonetheless, many people still see the brighter side of cryptocurrency, because it gives an incredibly dynamic and fast-growing market for investors. Actually, their trade volume beats the major European stock exchanges. Also, it is a clear indicator that traditional financial institutions can no longer hold the system properly. 

Sooner or later, cryptocurrency will be included in our daily lives. Many people will have the opportunity to save and invest, send money across the borders without interruption, and start their own businesses. Thanks to the fantastic opportunities that cryptocurrency brings to the world.

About the author

Hi I'm Jeff Kiefer and this is my blog. I've been in the Internet Marketing industry for over ten years now, and I would like to share all my experience, insights and other fun stuff with you guys!

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