Cryptocurrency has enjoyed a rapid rise to prominence over the past few years and it is beginning to permeate all walks of life. You can now use bitcoin to buy a Rolex, a new car, season tickets for an NBA team, a meal at Burger King, a diamond ring and a luxury cruise. Rival coins like Litecoin, Ripple XRP and Ethereum are gaining traction and the potential is huge for crypto and the blockchain technology underpinning it. These are the top five benefits of cryptocurrency:
The fees are Lower
Bitcoin and other cryptocurrencies are hugely popular due to the speed, ease and anonymity they offer. They also reduce the number of fees you have to pay. Banks and other financial institutions often charge you for wire transfers, writing cheques, making foreign purchases and receiving payments from overseas. However, you do not typically have to pay a fee for completing cryptocurrency transactions, as the network compensates the miners.
Many users engage a third-party service such as Coinbase to create and manage their bitcoin wallets, and that can lead to fees. However, they are a lot smaller than the fees charged by traditional intermediaries. They are also not essential, as you can manage your crypto wallet yourself. Bitcoin transfers are also rapid, meaning you do not have to endure mind-numbing waiting periods for authorisation.
It is Universal and Decentralized
The Central Bank of Cyprus hit headlines around the world in March 2013 when it announced plans to take back uninsured deposits larger than $100,000 to recapitalise itself. That sparked fear and dismay among Cypriots and highlighted the grip that central banking institutions hold on personal finances. Yet that sort of skulduggery cannot happen with crypto, because it is decentralized.
You own bitcoin and other coins, and no central authority can take it away from you. Many people are losing trust in banks and they appreciate the ability to complete peer to peer transactions using blockchain technology, cutting out the middleman in one fell swoop. These currencies transcend international borders with ease. They are not subject to interest rates, levies and exchange rates charged by specific countries.
One in three Kenyans now holds a bitcoin wallet, which is a real shot in the arm for people that do not have access to traditional cash.
No Third-Party Interference
Brokers, agents and legal representatives all complicate traditional financial transactions, adding expense and bureaucracy to what should really be a straightforward transfer. Yet crypto presents you with a tantalising opportunity to eradicate the need for paperwork, brokerage fees, commissions, handling fees and other conditions in one fell swoop.
Cryptocurrency transactions are one to one, and there is no danger of a third party interrupting the process. Governments, banks and other intermediaries can all hold up the traditional process of user transactions, and they can freeze your assets. Those fears are basically eliminated when it comes to bitcoin and other digital coins. It means that users experience a greater degree of freedom than with fiat currencies.
People that enjoy sports wagering and esports betting love cryptocurrencies, as it ensures that deposits and withdrawals are rapid, transactions are anonymous and third parties cannot threaten the process. Bookmakers also like them, because they do not have to pay fees to third parties, so they have made bitcoin central to their offerings. It also allows them to offer more attractive odds as they are not paying a cut of their margins to middlemen, benefiting both the operators and the bettors.
It Lessens the Risk of Fraud and Identity Theft
Cryptocurrencies are digital and they cannot be counterfeited, reversed or backtracked. You do not have to fill in personal details on web forms, meaning the risk of identity theft is also eliminated. When sending crypto you can be extremely discrete and remain anonymous, as there is no obligation to provide details of your personal identity. You are the sole owner of the private and public encryption keys that make up your network address and you can bask in anonymity.
Under traditional systems, your entire transaction history can be documented, and this can be targeted by hackers. Using crypto safeguards the privacy of your financial history and protects you from the threat of identity theft. Blockchain technology uses strong encryption techniques to safeguard against fraud and account tampering.
It is Becoming Less Volatile
There are a number of clear benefits to cryptocurrencies, but their volatility was always the major downside. Sports bettors could see their winning margins diminished overnight if bitcoin plummeted in value. People holding bitcoin have always feared that it could suffer the sort of crash the market experienced in 2018. However, bitcoin is becoming less volatile.
BTC has actually been on a bit of a tear in 2019. It went from $3,890 at the beginning of January to the north of $10,000 this month, earning investors a significant profit. It is still prone to far sharper peaks and troughs than fiat currency, and its global nature makes it vulnerable to the vagaries of markets across the globe, but the declines it suffers are becoming fewer and less sharp.
In some countries, cryptocurrencies are a lot more stable than traditional currencies. Venezuela, for example, is besieged by rampant inflation, and millions of people have switched to bitcoin. Others horde it as an asset like gold, but more people are using it as a digital currency that can be used to purchase all manner of consumer products. The list of retailers accepting cryptocurrencies continues to swell, and it genuinely has the potential to rival fiat currencies in future.