It is normal to be hesitant about using cryptocurrency as the medium of financial transactions.
There is a school of thought which believes, it is a domain suitable for criminals, fraudsters, and terrorists. Cryptocurrencies allow them to maintain anonymity for discreet transactions and ransomware scams.
However, the increasing acceptance of Bitcoin as a digital currency has initiated a positive perspective around this mode. It brings a distinct set of pros for the users, making them overlook the risks tag along.
According to the Finder, a post on social media surfaces about Bitcoin every three seconds. If we do the math, it means 1203 posts pop up per hour, making it to 20 posts per minute.
A more general view on the crypto landscape speaks of its overall growth, too. Block Social tells us how cryptocurrency exchanges around the globe have exceeded 300 during 2020.
In fact, the success of crypto shows us the loopholes of the traditional banking system. If you, too, want to leap on this bandwagon and aren’t sure about your next move, this is the right place. Our blog sheds light on the positive aspects of cryptocurrency that make it a more established form of financial trade.
1. Easy transactions
When dealing with brokers or legal representatives, you have to pay the transaction fee from time to time. This comes along with immense paperwork, commission, brokerage charges, and so much more. Using cryptocurrency eliminates the need for a middle man. The transaction changes into a one-to-one affair taking place on a secure network.
No wonder Forbes stated that adopting blockchain technology can save financial organizations around $12 billion yearly. A deduction of extra charges from third parties and reduced operations cost is saving millions for huge organizations.
Moreover, the transactions are transparent, making it easier for you to establish audit trials. There is no more confusion over who pays whom. All parties involved in the transaction know each other quite well. Accountability on each party grows.
2. Asset transfers
A financial analyst rightfully describes cryptocurrency blockchain to be a “large property rights database.” On the one hand, it helps execute and enforce two-party contracts on commodities such as real estate and automobiles. At the same time, it also facilitates special modes of transfer.
As per Born2Invest, Bitcoin alone is responsible for an average of 350 000 daily transactions on the Blockchain. Meanwhile, Coinbase has 30 million cryptocurrency users (Block Social). The increasing figures of each crypto speak of its acceptance worldwide.
The parties involved in asset transfer can design contracts and add third-party approvals at a later date. It also helps to reference the external facts and gives the parties exclusive governance of their account. It reduces the time and money involved in asset transfers. Perhaps this is why US federal government spending on Blockchain shall reach $123.5 million by 2022.
3. Confidential transactions
Cryptocurrency purchases remain discreet. Unless a user voluntarily publishes his transactions, the purchase is never associated with their identity. In official scenarios, such as when you put your cars for sale, the parties must reveal an association with their cryptocurrencies. It helps to establish trust and relevance.
Within the cash/credit system, your entire transaction history turns into a reference document for the banks/credit agencies involved. On the contrary, cryptocurrency is a transaction that is a unique exchange between two parties. They can negotiate and agree on preferable terms. The information exchange takes place on the “push” basis. This means you transmit only that which you wish to send to the recipient and nothing else.
It keeps your financial history secure and guards you against identity theft. Chances of which are quite high under the traditional transaction system.
On top of this, the combination of Blockchain with IoT is considered revolutionary by the experts. This has accelerated data exchange, lowering the operation costs, and improved the security of files. Your Tech Diet predicted that 75% of the IoT industry would adopt Blockchain technology by the end of 2020. Lack of exposure is, thus, something the entire industry is looking for.
4. Transaction Fee
You have probably faced hefty monthly account statements from your bank/credit companies. The transaction fee charged at every transaction you have made might leave you shocked. The whopping fee of multiple transactions can take you by surprise at the end of each month.
In the case of cryptocurrency exchange, the data miners receive their share from the cryptocurrency network involved. Transaction fee does not apply as the remote and separate computer systems that do the number-crunching get a pretty fair share.
According to Investopedia, the Bitcoin reward for miners halves for every 210 000 blocks added to the chain. Nonetheless, this system has freed the transaction parties to pay the fee, making it the most feasible.
However, there might be some external fee involved if you engage a third-party management service to maintain the crypto wallet. These charges are likely to be quite less than the transaction charges levied by the traditional banking system.
5. Hold Ownership
The traditional banking system works in a manner where the amount goes to the nominee if a person passes away. The chances of the account closing are quite high when you infringe the terms of their services. Unlike this framework, digital currencies give you the sole ownership of private and public encryption keys. This makes it easier for you to identify the encryption network.
6. High security
Once a party authorizes the cryptocurrency transfer, they cannot reverse it. This is not the case in “charge-back” transactions allowed by the credit companies. Cryptocurrency gives you reliable encryption throughout the transaction process to keep it protected from bugs and malicious entities.
Cryptocurrency is taking the financial world by storm, and we know the reasons why. It is about time you kickstart your digital finances journey and make the most out of it. Who knows what surprises are about to come later in this landscape!
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