From the start and through the turbulent journey to mainstream adoption, cryptography has inspired both enthusiasm and fear. After being unfairly defeated over the years, it’s time to defend cryptocurrencies.
Unfortunately, for cryptocurrencies, first impressions are important. Bitcoin (BTC) first became prominent in the early years as the preferred currency for illegal activities – preferred by dark internet users, ransom hackers, drug dealers and money launderers worldwide.
But the world has changed since the first bitcoins were mined in January 2009. There are currently more than 18 million bitcoins in circulation, and more than 90,000 people have $ 1 million or more in bitcoin, according to Bitinfocharts, a cryptocurrency tracking system.
There are already signs that the cryptocurrency is finally gaining broad acceptance. Just last year, El Salvador declared Bitcoin a legal tender in September, and in October, the first US Bitcoin Futures ETF (ETF) was launched on the New York Stock Exchange. The payment giant Visa also launched a global cryptocurrency advisory practice in December to help financial institutions move forward on their cryptocurrency journey.
There is even talk of cryptocurrencies becoming a medium of exchange in Afghanistan, which is a very real example of how cryptocurrencies allow economic transactions in a situation where the monetary system itself is collapsing.
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Obstacles and barriers
Despite these success stories, persistent public skepticism continues to linger, with politicians voicing objections to a decentralized currency that makes the public accountable for their own money. China declared cryptocurrency transactions illegal in September, citing concerns about gambling and money laundering. Politicians around the world have raised concerns about its ability to transform the existing dynamics of the current financial ecosystem.
The main factor behind all this is fear, and recent research suggests that it may be the fear of the unknown. According to a national survey commissioned by the financial app Ziglu, almost a third (31%) of British respondents are interested in investing in cryptocurrencies, but 62% of respondents refrain from buying because they do not understand the market. As proof that cryptocurrency gains legitimacy in the eyes of the public, the survey also showed it
Bitcoin is now a smarter investment than real estate.
It is time to realize that despite the inherent risk, cryptocurrencies are also a force for good in the world. In an age of low savings rates, this relatively new asset class gives us all the opportunity to invest in cryptocurrencies without the traditional barriers of traditional finance, no matter how much money we have or how little we have.
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Some people do not even have a safe place to keep their hard earned money. According to the World Bank, 1.7 billion people worldwide do not have a bank account. Many of us take for granted the ability to transfer money using credit cards and bank transfers – sending large amounts of money to friends and family with the touch of a smartphone – but for those who do not use banking services, this is simply not possible.
However, over 80% of the world’s population has a smartphone, which is all they need to send encrypted transmissions across international borders. Cryptocurrency promotes financial inclusion by giving millions of people without access to platforms like PayPal or Venmo the ability to transfer money for pennies. It is also a good option for those who dislike high bank charges because this new infrastructure, unlike traditional paid bars, is not limited to a profit motive.
Benefits of encryption
Smart contracts can replace the services of banks, money transfer companies or legal services, while cryptocurrencies and digital wallets can provide flexibility, such as lending to customers and financial sovereignty, without the need for a central government.
Cryptocurrencies can also protect citizens from economic shocks. Venezuela is a good example, where many citizens are already suffering from high inflation rates and the impact of US sanctions is also taking their toll on their banks. They are increasingly converting their salaries into cryptocurrencies and using blockchain to transfer funds and payments.
For developing countries, Bitcoin is a great way to eradicate corruption because society can track any transaction.