Is cryptocurrency the future of money and asset transfer? Is digital money the answer to our modern money problems?
The questions above have been asked by finance experts, analysts, and the public countless times. And they are the right question as over the past decade, cryptocurrencies like Bitcoin and Ethereum have taken the world of finance by storm.
The technology’s popularity is due to the explosion in the value of coins and tokens. And it is no surprise to see people using cryptos for everyday transactions.
Looking at the trends, it is evident that crypto has come to stay. The question that needs to be answered is whether crypto is replacing the traditional money system.
To better answer that, let’s look at what cryptocurrencies are and how they work.
What is Cryptocurrency?
A cryptocurrency is simply a digital or virtual currency used as a medium of transaction. A cryptocurrency possesses similar properties to fiat (real-world currency) except that it doesn’t have any physical existence.
Cryptography is the technology that powers all cryptos. It uses code to secure online systems, networks, and digital data. The currency is used to solve complex math problems, and its use and circulation are ‘controlled’ by a decentralized network. Unlike fiat, no centralized authority can devalue crypto through tax or printing more money.
Each crypto is worth precisely what investors/people are willing to buy and sell on exchanges. Like any commodity, the price of cryptocurrencies is based on the supply and demand (and use cases) of the crypto in the market.
Each coin ownership is stored in a public ledger called the Blockchain. This database oversees the creation of additional coins and verifies coin transfers and ownerships.
The Blockchain stores every transaction record in blocks, creating a data chain that cannot be tampered with.
Now you know what cryptocurrencies are and how they work. Perhaps you’ve wondered about the differences between crypto and real-world currency. Below, we look into the properties that differentiate crypto and fiat.
Read on to find out.
Crypto vs. Fiat
We can’t talk about differences without talking about similarities. The most considerable resemblance is that both can be used as currencies, assigned values and can be used for payments.
The less obvious similarity is that their values are both regulated. Both gain and lose value are based on market circulation and use.
Differences:
● Decentralization: This is a word you’ll often hear in crypto. It means that to trade, hold crypto, you don’t need the permission of the government. Instead, your actions are facilitated by the codes in the Blockchain. While USD requires the authentication of the government, through the use of things like serial numbers and watermarks, crypto is traded on a peer-to-peer level.
● Investment: Unlike fiat, cryptocurrencies can be easily invested. Because the value of every crypto depends on its supply and demand in the market, it makes specific cryptos like Bitcoin something you can invest in and profit from. While you can “invest” in the US dollar, it isn’t done in the same simple and efficient way.
● Global use: Cryptocurrencies can be used globally by anyone with access to the internet, anywhere in the world. But you can mainly use the US dollar in the US and the Euro mainly in Europe.
A recurring question people have about cryptocurrency is, “Why do we really need cryptocurrencies?”
To some people, cryptocurrencies are a non-solution for a non-problem, especially bankers and regulators.
But reality paints a very different picture.
One of the reasons cryptos were created is to provide a fairer system that eliminates all the financial industry’s headaches.
Below are the problems cryptocurrencies solve and why we need them.
Why do we really need cryptocurrencies?
The current financial system is full of flaws: questionable regulations, unfair policies, inequality, lack of transparency, inflation, etc. The problems that plague the system are numerous.
These are some of the problems that cryptocurrencies solve:
● Inefficient money/payment transfer:
Real-world money is inefficient to move around. As a result, we have to rely on third parties, who each share the funds to facilitate the transaction. And these intermediaries do not guarantee the best services as sometimes the transactions can take days to be received.
The high fees and long settlement times are justified because these third parties are meant to be trusted guardians. Unlike fiat, which requires intermediaries to move around, digital currencies have a built-in payment and settlement process. Because of this, crypto makes money transfer smooth and less expensive. A good example is Bitcoin, with which you can send hundreds of millions of dollars to someone across the world in a matter of minutes, for the price of a coffee!
● Foreign Exchange Fees:
Imagine every store/shop had their currency, and to transact in the following store, you had to forfeit 30% of the value. This process is similar to what happens to fiat currencies. The United Nations recognizes 180 countries, and they all have different currencies. To transact with each other, there are transaction fees that are usually higher than usual.
Before now, foreign exchange fees were unavoidable, mainly because a country’s Central bank-issued currencies are restricted by geography. If you’ve ever traveled to another country, you’ve likely come back to your country with a change that was/is unusable.
But cryptocurrencies are breaking through the barrier because they are borderless.
Remember, crypto is now an alternative when you are charged foreign exchange fees or find yourself with worthless foreign spare change.
● The Threat of Asset Confiscation:
The threat of your assets and savings being seized is real. This threat isn’t just for people fleeing war-torn countries. Even leaders can have their bank accounts and assets taken by financial authorities.
This has given rise to offshore banking, worth over $30 trillion. Most of the world doesn’t have access to offshore banking solutions. Luckily, cryptocurrencies offer anyone a non-sovereign store of value that can’t be censored or seized.
The solutions and benefits cryptocurrencies bring to the financial industry are numerous.
One notable benefit is the fact that you can make money from cryptocurrencies.
Anyone can profit from crypto, and there are many ways to do so.
Perhaps you want to go into crypto to make money, and you don’t know the currencies to look out for or invest in.
Below are a few cryptocurrencies we recommend you invest in/trade and get a nice profit.
Cryptos to Invest in
● Bitcoin ($BTC):
Bitcoin is currently the most traded and held cryptocurrency worldwide. The public first heard about the cryptocurrency after its whitepaper was created by a person or group using the alias Satoshi Nakamoto. Currently, the cryptocurrency is in its 12th year since its inception, as it was launched in January 2009.
At the time of writing, the price of one Bitcoin is $57,419.80, and it is remarkable to think that in 2010, one Bitcoin was worth less than one cent.
● Ethereum (ETH):
Second, only to Bitcoin, Ethereum is another cryptocurrency that has achieved worldwide use and popularity. ETH/Ether is powered by the Ethereum blockchain, a decentralized open-source blockchain system. The Blockchain functions as a platform for other cryptocurrencies and enables decentralized smart contracts’ executions.
Currently, Ethereum is worth $4,767.24 and is the type of cryptocurrency that is sure to give you an excellent Return of Investment (RoI).
● HaggleX (HAG):
HaggleX is the native token of the HaggleX exchange platform. HAG is built on the Binance Smart Chain (BSC) and is designed to give users several benefits like lesser transactional fees on the platform.
The mobile transfer system is adopting innovations, which are led by blockchain technology. Some of these innovations focus on cross-border payment, trading, savings, and lending.
HaggleX is a multi-currency exchange that offers such services, which is facilitated by the HAG token.
Save Your Cryptos with HaggleX
HaggleX offers its users the opportunity to save in crypto. With the HaggleX app, you can earn up to 21% interest when you save your Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), USDT, or HaggleX (HAG).
Download the HaggleX app today and start your crypto savings journey.
Google Play Store: https://play.google.com/store/apps/details?id=com.hagglex.hagglex
Apple Store: https://apps.apple.com/ng/app/hagglex-buy-sell-btc-and-eth/id1535046179
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