Cryptocurrency is getting more sophisticated as it matures. Some large financial institutions are starting to re-platform onto this new financial infrastructure.
Hardcore enthusiasts promote crypto technologies because they believe in their ability to lead to social change. But they downplay their risks.
Look past the utopian rhetoric and star-studded bluster, and you’ll see cryptocurrencies are making real changes to our lives. Here are just a few ways.
In the span of a few years, cryptocurrencies have gone from digital novelties to trillion-dollar technologies. They’re now held as investments and used to buy a wide range of goods, including software, digital art pieces, and even illegal drugs.
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Cryptocurrency offers consumers a new way to handle their finances, but it also presents challenges for brands seeking to reach and engage them. For instance, it’s a new world with different rules, from the ways transactions are tracked (on the blockchain) to how those transactions are taxed.
Despite the many uncertainties, brands can take advantage of this new and emerging market by positioning themselves as experts in the space. They can help consumers navigate the crypto universe by reducing risks and providing education on how to buy, sell, and store cryptocurrency. They can also make it easier for intenders to enter the crypto market by partnering with established payment apps like Venmo that offer a more comfortable entry point into the space, or by providing educational content that’s easy to understand. As a result, they’ll help consumers build trust in the industry that’s been marred by high levels of volatility. They’ll also help consumers make the best financial decisions for their unique situations and goals.
Reduced Risk of Fraud
To crypto enthusiasts, cryptocurrencies empower people to make their own financial decisions rather than being dictated by government or Wall Street. But these technologies don’t fit neatly into existing regulatory frameworks and can be exploited by criminal groups, stoke inequality, have drastic market volatility, and require massive amounts of electricity to mine and operate.
Cryptocurrency is a form of decentralized money that operates on the blockchain, an immutable and transparent record-keeping system. This means it can be difficult to censor or shut down, and that it is less vulnerable to fraud. It also makes it possible to transfer funds to any address, in any country, instantly and without cost.
This technology is revolutionizing crowdfunding and initial coin offerings, allowing companies to raise large sums of money from many small investors, instead of a few big ones. It’s also helping reduce click fraud for marketers by making it harder for bots to fraudulently manipulate data.
But if you look past the utopian rhetoric, the star-studded endorsements, and the regulators playing catch-up, you’ll find that the distributed blockchain protocol that powers cryptocurrency is slowly working its way into the back ends of industries like traditional banking services, pharmaceutical giants, film development firms, international shipping companies, and others, bringing with it real benefits like transparency, speed, and efficiency.
Changes the Money Transfer Process
While some experts worry cryptocurrency will be a flash in the pan, others believe it could be the next big thing. But what exactly is crypto, and how does it impact the way we invest, bank, and use money?
Cryptocurrency is a decentralized digital alternative to traditional currencies. It eliminates the need for centralized intermediaries like banks and monetary institutions to validate trust and enforce contracts between two parties. Instead, these entities are replaced by blockchain technology that tracks and records information cryptically, creating a transparent, secure system that is faster, cheaper, and more efficient than traditional processes.
Hardcore enthusiasts evangelize crypto not just because they see its potential for growth, but also because they believe it will help change society. They think that using crypto will remove corruption and get people to trust technology over government, which they see as inherently untrustworthy.
But despite the popularity of cryptocurrencies, many banks remain reluctant to offer these services, often citing concerns about security and stability. Regulatory agencies are working to change this, and with recent industry advancements, it’s possible for banks to streamline, enhance, and upgrade their financial services by adopting the power of crypto.
Keep Companies and Individuals Accountable
Cryptocurrency’s Wild West culture has caught the attention of government overseers. The lack of regulations in the multi-billion dollar industry has led to dramatic market fluctuations and has been exploited by criminals and fraudsters. As a result, many consumers support stricter rules in the sector.
Hardcore enthusiasts believe that cryptocurrency is a way to shake up the exclusive world of finance and change who holds power in society. These beliefs are fuelled by the ideology that government is inherently corrupt and that crypto will give people a more democratic way to create wealth and power.
While it is true that cryptocurrencies can be used to fund criminal activities, they also offer a layer of transparency and accountability for investors. As a result, savvy brands in the crypto space can build consumer trust by acting as a safety net and an educator.
The popularity of crypto has prompted traditional financial institutions to step up their efforts to facilitate the technology. As a result, some brands may find themselves in a conflicted position. They will need to balance the need for regulation against their desire to preserve the fundamental characteristics that make digital currencies unique. For example, a law that regulates digital assets as securities may cause the popularity of some cryptocurrencies to decline.
Make Foreign Money Transfers and Transactions Safer
Cryptocurrency’s popularity has fueled speculation that it could disrupt current financial networks. While cryptocurrencies do pose risks, particularly for their decentralized nature and the huge amounts of energy needed to mine them, some experts are also seeing positive impacts.
A growing number of fintechs and even some large retail banks are embracing cryptocurrency and distributed ledger technology (DLT) innovations like blockchain to upgrade payment and banking systems. They’re recognizing that this technology can reduce costs, make transactions safer, and improve transparency and efficiency.
For example, the UK-based fintech Revolut offers money transfer services that allow customers to send and receive funds in pounds, dollars, euros, or one of five cryptocurrencies. This allows users to choose the best option depending on their situation or where they live. They can also use the same digital wallet to manage multiple cryptocurrencies, which gives them more options and control over their money. Plus, because cryptocurrencies don’t have any central authority, they can’t be manipulated by governments or other institutions. This is a significant benefit to those who live in unstable countries or are trying to escape an authoritarian regime. The freedom to move money and assets without fear of being seized or blocked can be lifesaving.
Offer a Stable Alternative to Unstable Currencies
Cryptocurrency is a global phenomenon, and it’s creating major change around the world at the macro level. While the price of cryptocurrencies can be volatile and there are many questions surrounding them, this new form of money is transforming the way we live.
As the technology behind it is gaining more and more momentum, companies, investors and even some governments are jumping on the cryptocurrency bandwagon. Some of them are doing so out of fear of missing out (FOMO), while others see the potential for financial reward.
One of the biggest reasons why people are getting involved is that they believe that it can be a stable alternative to unstable currencies. This is because cryptocurrencies are decentralized, meaning they aren’t managed by central banks that typically reduce the value of currency over time through inflation.
Cryptocurrency is also unregulated and not subject to the same financial laws that govern other investments. This could be a problem for some consumers, especially since profits from buying and selling cryptocurrencies are taxable. It is also energy-intensive, with mining consuming 40 billion pounds of carbon dioxide in one year alone. This could be another reason why some are skeptical of claims that crypto will bolster financial inclusion.
Give People Control of Their Own Money
Cryptocurrency (or crypto) is money that works over a computer network without relying on any central authority. It uses encryption to secure transactions and control the creation of new currency units. It can be used to make purchases, or it can be invested in like any other asset. But investing in crypto is a risky endeavor, and it comes with unique tax implications.
The people who use cryptocurrency and promote its use are not just spreading technology, they’re also promoting an ideology. They believe that governments are corrupt, and that by using crypto they can change society to trust technology over government.
Despite this, the world is divided over how to regulate crypto. Some governments have taken a hands-off approach, but the rise of blockchain technology has forced regulators to begin crafting rules for this emerging sector.
Still, many people are skeptical of cryptocurrencies. They say they’re a breeding ground for fraud and corruption, that their price volatility makes them unsuitable for everyday spending, and that mining consumes vast amounts of electricity. Regardless of their opinions, the truth is that cryptocurrencies are here to stay. They’re changing the way we invest, bank, and use money.