If 2017 was the year of bitcoin, it was also the year when many investors dug in their heels and refused to embrace cryptocurrencies. While new investors sought to profit from price changes, some condemned cryptocurrencies as a bubble and a source of speculative investment or even gambling.
While mainstream industry has yet to embrace virtual currencies to the same extent that it has conventional fiat money, there are several instances in which the cryptocurrency realm has influenced (or will effect) the world at large. According to Nasdaq, here are a handful of these advantages.
1. Provide New Ways to Crowdfund
One of the most significant advantages of cryptocurrencies is that it has enabled new forms of crowdsourcing. Startups and other ventures now have access to a larger pool of possible investors than ever before, thanks to ICOs and other forms of token sales.
2. Minimize the Potential for Fraud
Cryptocurrencies were based on security and privacy ideals. (For additional information, see The Rise of ‘Private’ Cryptocurrencies.) While there have been some high-profile cases of fraud in the area, the fact that it is continually changing has meant that security measures are always in place to resist the next likely assault.
Furthermore, since cryptocurrencies are not linked to a bank account or physical payments, and are only exchanged electronically through blockchain ledger systems, they are anticipated to lessen total fraud in the future.
3. Revolutionize the Money Transfer Process
Some conventional methods of money transfer may take several days to clear, especially if the money is being moved abroad. Cryptocurrencies provide a simplified system that does not need the same sorts of checks and balances. As a result, they may enable possibly speedier transfers.
4. Promote Scientific Advances
Data and information may now be stored and exchanged in innovative and safe ways thanks to blockchain technology. With more access to information and fewer obstacles to knowledge exchange, it’s possible that many sectors will experience an increase in innovation as blockchain becomes more mainstream. Scientific progress may become simpler to assist in the process.
5. Act as a Stable Alternative to Unstable Currencies
Some nations’ currencies are volatile, with inflation and other problems. In such circumstances, cryptocurrency, which is decentralized and available across the majority of the globe, might be a safer option.
6. Open Up Financial Control to the Individual
Many individuals are hesitant to deposit their money in a bank or other financial institution, but having all of your money in cash and at home is not the safest choice. In these circumstances, cryptocurrency might give an alternate entry point to the greater financial world, giving people more control over their own resources.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and this article is not a suggestion by Investopedia or the author to do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. The author owns cryptocurrencies as of the day this post was published.
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