- 7 Amazing Benefits of Cryptocurrency: A New Digital Economy
- How will cryptocurrency help you?
- Pros and cons of cryptocurrency.
- ADVANTAGES OF CRYPTOCURRENCY
- MOST IMPORTANT. YOU OWN IT
- THE BAD THINGS ABOUT CRYPTOCURRENCY
- CRYPTOCURRENCY DISADVANTAGES:
- HIGH RISK OF LOSS
- FINAL THOUGHTS
- Understanding Cryptocurrency and Its Benefits
- A Brief History of Cryptocurrency
- Traditional Currencies vs. Cryptocurrencies
- What is Cryptocurrency?
- Benefits of Cryptocurrency
- What is Cryptography?
- Cryptography in Bitcoin Transactions
- Bitcoin vs. Ethereum
- The Future of Cryptocurrency
- The Benefits of Cryptocurrency • Trading Crypto • Benzinga
- Better Payment Structure
- Growth Investment
- Financial Stability
- Smart Contracts
- Trade Cryptocurrency
- There’s More to Life Than Money
7 Amazing Benefits of Cryptocurrency: A New Digital Economy
Why should you use Cryptocurrency? Let’s see, crypto, to do or not to do? That is the question and it’s a good question — best of all the answer seems to be fairly simple.
Over the last couple of years, the term cryptocurrency has been rapidly gaining ground and understanding of its use and value in the public eye. At first it seemed unfamiliar and somewhat scary, the credit card looked to users in its early days.
You might be more familiar with terms Bitcoin, and Ether. These are all cryptocurrencies using the Blockchain Technology. As a result of the great work of the Blockchain Technology to keep this currency and technology safe, we are the benefactors.
Currently there are many types of cryptocurrency. A simple google search of the popular trend shows you the start of the growth and where it is taking us.
Before you continue reading, let me give you a short primer of cryptocurrency, its prevalence and its customary usage at this time. Cryptocurrency is a digital currency that is created and managed through the use of advanced encryption techniques known as cryptography.
Cryptocurrency made the leap from being an academic concept to (virtual) reality with the creation of Bitcoin in 2009.
While Bitcoin attracted a growing following in subsequent years, it captured significant investor and media attention in April 2013 when it peaked at a record $266 per bitcoin after surging 10-fold in the preceding two months. Bitcoin sports a market value of over $10 billion now. Globally
How will cryptocurrency help you?
Below, I will outline some pros and cons of us adopting a global acceptance of Cryptocurrency. And my hopes with this is, you will understand the benefits of cryptocurrency.
Pros and cons of cryptocurrency.
The benefits of cryptocurrency over current fiat currency tech
Example: Central governments can’t take it away
Remember what happened in Cyprus in March 2013?
The Central Bank wanted to take back uninsured deposits larger than $100,000 to help recapitalize itself, causing huge unrest in the local population.
It originally wanted to take a percentage of deposits below that figure, eating directly into family savings. That can’t happen with cryptocurrency/bitcoin. You own decentralized currency.
No central authority has control, and so a bank can’t take it away from you. For those who find their trust in the traditional banking system unraveling, that’s a big benefit.
Take a look at some of the improvements that can be made to fiat currency by shifting towards digital cash:
ADVANTAGES OF CRYPTOCURRENCY
- Fraud: Cryptocurrencies are digital and cannot be counterfeited or reversed arbitrarily by the sender, as with credit card charge-backs.
- Immediate Settlement: Purchasing real property typically involves a number of third parties (Lawyers, Notary), delays, and payment of fees. In many ways, the bitcoin/cryptocurrency blockchain is a “large property rights database,” says Gallippi. Bitcoin contracts can be designed and enforced to eliminate or add third party approvals, reference external facts, or be completed at a future date or time for a fraction of the expense and time required to complete traditional asset transfers.
- Lower Fees: There aren’t usually transaction fees for cryptocurrency exchanges because the miners are compensated by the network (Side note: This is the case for now). Even though there’s no bitcoin/cryptocurrency transaction fee, many expect that most users will engage a third-party service, such as Coinbase, creating and maintaining their own bitcoin wallets. These services act Paypal does for cash or credit card users, providing the online exchange system for bitcoin, and as such, they’re ly to charge fees. It’s interesting to note that Paypal does not accept or transfer bitcoins.
- Identity Theft: When you give your credit card to a merchant, you give him or her access to your full credit line, even if the transaction is for a small amount. Credit cards operate on a “pull” basis, where the store initiates the payment and pulls the designated amount from your account. Cryptocurrency uses a “push” mechanism that allows the cryptocurrency holder to send exactly what he or she wants to the merchant or recipient with no further information
- Access to Everyone: In fact, here are approximately 2.2 billion individuals with access to the Internet or mobile phones who don’t currently have access to traditional exchange systems. These individuals are primed for the Cryptocurrency market. Kenya’s M-PESA system, a mobile phone-based money transfer, and microfinancing service recently announced a bitcoin device, with one in three Kenyans now owning a bitcoin wallet. (Let me repeat that again. 1/3)
- Decentralization — A global network of computers use blockchain technology to jointly manage the database that records Bitcoin transactions. That is, Bitcoin is managed by its network, and not any one central authority. Decentralization means the network operates on a user-to-user (or peer-to-peer) basis. The forms of mass collaboration this makes possible are just beginning to be investigated.
- Recognition at universal level– Since cryptocurrency is not bound by the exchange rates, interest rates, transactions charges or other charges of any country, therefore it can be used at an international level without experiencing any problems. This, in turn, saves lots of time as well as money on the part of any business which is otherwise spent in transferring money from one country to the other. Cryptocurrency operates at the universal level and hence makes transactions quite easy.
MOST IMPORTANT. YOU OWN IT
There is no other electronic cash system in which your account isn’t owned by someone else.
Take PayPal, for example: if the company decides for some reason that your account has been misused, it has the power to freeze all of the assets held in the account. This can happen without consulting you (Trust me, this has happened to me).
It is then up to you to jump through whatever hoops necessary to get cleared to access your funds. With cryptocurrency, you own the private key and the corresponding public key that makes up your cryptocurrency address. No one can take that away from you.
(Unless you lose it yourself, or host it with a web-based wallet service that loses it for you).
THE BAD THINGS ABOUT CRYPTOCURRENCY
Overall, cryptocurrencies have a long way to go before they can replace credit cards and traditional currencies in global commerce.
- Fact is many people are still unaware of cryptocurrency aka Digital currency
- Moreover, people need to be educated about it to be able to apply it to their lives.
- Businesses need to start accepting it
- They need to make it easier to sign up and get started.
HIGH RISK OF LOSS
Timothy B. Lee, adjunct scholar at the Cato Institute and regular contributor to Forbes.com, identifies four reasons to be cautious about bitcoins:
- Lack of Security. There is no safety net to protect your bitcoins from human error, technical glitches (hard drive failures, malware), or fiduciary fraud. According to an article in the UK edition of Wired, 18 of 40 web-based businesses offering to exchange bitcoins into other fiat currencies have gone business, with only six exchanges reimbursing their customers. The authors of the study estimate that the median lifespan of any bitcoin exchange is 381 days, with a 29.9% chance that a new exchange will close within a year of opening.
- Increased Regulation. Relatively benign guidelines are currently in place. However, law enforcement agencies could decide that bitcoins are a “giant money laundering scheme.”They could then enact more stringent regulations that would diminish the currency’s value.
- Limited Scaling. The design of the system limits the speed and number of transactions processed. This makes it unly that bitcoins will replace conventional credit card transactions.
- Lack of Applications. While acknowledging bitcoins’ popular use for illegal transactions, Lee questions how useful bitcoins really are. There are a few things Bitcoin would need to be truly disruptive to existing fiat currencies or electronic payment systems. For instance, applications for low-cost international money transfers, the creation of complex electronic contracts, or use in Kickstarter-style fundraising campaigns or micropayment transfers.
Overall, the future appeal of cryptocurrencies lies in allowing you ultimate control over your money. This includes fast secure global transactions, and lower transaction fees when compared to all existing currencies. When used properly it will be the initiator of many emerging systems that will change our global economic system.
Understanding Cryptocurrency and Its Benefits
Cryptocurrencies have become increasingly popular over the past several years – as of 2018, there were more than 1,600 of them! And the number is constantly growing.
With that has come to an increase in demand for developers of the blockchain (the underlying technology of cryptocurrencies such as bitcoin).
The salaries blockchain developers earn show how much they are valued: According to Indeed, the average salary of a full-stack developer is more than $112,000. There’s even a dedicated website for cryptocurrency jobs.
Whether you’re interested in a career as a blockchain developer or you just want to keep up with the latest trends in tech, Simplilearn’s Cryptocurrency Explained video explains what cryptocurrency is and why it’s important will get you off to a good start. Here we’ll recap what’s covered in the video.
A Brief History of Cryptocurrency
In the caveman era, people used the barter system, in which goods and services are exchanged among two or more people. For instance, someone might exchange seven apples for seven oranges. The barter system fell popular use because it had some glaring flaws:
- People’s requirements have to coincide—if you have something to trade, someone else has to want it, and you have to want what the other person is offering.
- There’s no common measure of value—you have to decide how many of your items you are willing to trade for other items, and not all items can be divided. For example, you cannot divide a live animal into smaller units.
- The goods cannot be transported easily, un our modern currency, which fits in a wallet or is stored on a mobile phone.
After people realized the barter system didn’t work very well, the currency went through a few iterations: In 110 B.C., an official currency was minted; in A.D.
1250, gold-plated florins were introduced and used across Europe; and from 1600 to 1900, the paper currency gained widespread popularity and ended up being used around the world.
This is how modern currency as we know it came into existence.
Modern currency includes paper currency, coins, credit cards, and digital wallets—for example, Apple Pay, Amazon Pay, Paytm, PayPal, and so on. All of it is controlled by banks and governments, meaning that there is a centralized regulatory authority that limits how paper currency and credit cards work.
Traditional Currencies vs. Cryptocurrencies
Imagine a scenario in which you want to repay a friend who bought you lunch, by sending money online to his or her account. There are several ways in which this could go wrong, including:
- The financial institution could have a technical issue, such as its systems are down or the machines aren’t working properly.
- Your or your friend’s account could have been hacked—for example, there could be a denial-of-service attack or identity theft.
- The transfer limits for your or your friend’s account could have been exceeded.
There is a central point of failure: the bank.
This is why the future of currency lies with cryptocurrency. Now imagine a similar transaction between two people using the bitcoin app. A notification appears asking whether the person is sure he or she is ready to transfer bitcoins.
If yes, processing takes place: The system authenticates the user’s identity, checks whether the user has the required balance to make that transaction, and so on. After that’s done, the payment is transferred and the money lands in the receiver’s account.
All of this happens in a matter of minutes.
Cryptocurrency, then, removes all the problems of modern banking: There are no limits to the funds you can transfer, your accounts cannot be hacked, and there is no central point of failure.
As mentioned above, as of 2018 there are more than 1,600 cryptocurrencies available; some popular ones are Bitcoin, Litecoin, Ethereum, and Zcash. And a new cryptocurrency crops up every single day.
Considering how much growth they’re experiencing at the moment, there’s a good chance that there are plenty more to come!
What is Cryptocurrency?
A cryptocurrency is a digital or virtual currency that is meant to be a medium of exchange. It is quite similar to real-world currency, except it does not have any physical embodiment, and it uses cryptography to work.
Because cryptocurrencies operate independently and in a decentralized manner, without a bank or a central authority, new units can be added only after certain conditions are met.
For example, with Bitcoin, only after a block has been added to the blockchain will the miner be rewarded with bitcoins, and this is the only way new bitcoins can be generated.
The limit for bitcoins is 21 million; after this, no more bitcoins will be produced.
Benefits of Cryptocurrency
With cryptocurrency, the transaction cost is low to nothing at all—un, for example, the fee for transferring money from a digital wallet to a bank account.
You can make transactions at any time of the day or night, and there are no limits on purchases and withdrawals.
And anyone is free to use cryptocurrency, un setting up a bank account, which requires documentation and other paperwork.
International cryptocurrency transactions are faster than wire transfers too. Wire transfers take about half a day for the money to be moved from one place to another. With cryptocurrencies, transactions take only a matter of minutes or even seconds.
What is Cryptography?
Cryptography is a method of using encryption and decryption to secure communication in the presence of third parties with ill intent—that is, third parties who want to steal your data or eavesdrop on your conversation.
Cryptography uses computational algorithms such as SHA-256, which is the hashing algorithm that Bitcoin uses; a public key, which is a digital identity of the user shared with everyone; and a private key, which is a digital signature of the user that is kept hidden.
Decipher the global craze surrounding Bitcoin and Cryptocurrencies with the Blockchain Certification Course! Click here for the course preview!
Cryptography in Bitcoin Transactions
In a normal bitcoin transaction, first, there are the transaction details: whom you want to send the bitcoins to and how many bitcoins you want to send. Then the information is passed through a hashing algorithm.
Bitcoin, as mentioned, uses the SHA-256 algorithm. The output is then passed through a signature algorithm with the user’s private key, used to uniquely identify the user. The digitally signed output is then distributed across the network for other users to verify.
This is done by using the sender’s public key.
The users who check the transaction to see whether it’s valid or not are known as miners. After this is done, the transaction and several others are added to the blockchain, where the details cannot be changed. The SHA-256 algorithm looks something in the image below.
You can see how complicated it is, meaning it’s safe to say that the encryption is very difficult to hack.
Bitcoin vs. Ethereum
You now know that Bitcoin is a digital currency that is decentralized and works on the blockchain technology and that it uses a peer-to-peer network to perform transactions.
Ether is another popular digital currency, and it’s accepted in the Ethereum network.
The Ethereum network uses blockchain technology to create an open-source platform for building and deploying decentralized applications.
Bitcoin and ether are the biggest and most valuable cryptocurrencies right now.
Both of them use blockchain technology, in which transactions are added to a container called a block, and a chain of blocks is created in which data cannot be altered.
For both, the currency is mined using a method called proof of work, involving a mathematical puzzle that needs to be solved before a block can be added to the blockchain. Finally, both bitcoin and ether are widely used around the world.
Bitcoin is used to send money to someone. The way it works is very similar to the way real-life currency works. Ether is used as a currency within the Ethereum network, although it can be used for real-life transactions as well. Bitcoin transactions are done manually, which means you have to personally perform these transactions when you want them done.
With ether, you have the option to make transactions manual or automatic—they are programmable, which means the transactions take place when certain conditions have been met. As for timing, it takes about 10 minutes to perform a bitcoin transaction—this is the time it takes for a block to be added to the blockchain.
With ether, it takes about 20 seconds to do a transaction.
There is a limit to how many bitcoins can exist: 21 million. This number is supposed to be reached by the year 2140. Ether is expected to be around for a while and is not to exceed 100 million units.
Bitcoin is used for transactions involving goods and services, and ether uses blockchain technology to create a ledger to trigger a transaction when a certain condition is met.
Finally, Bitcoin uses the SHA-256 algorithm, and Ethereum uses the ethash algorithm.
As of May 2020, 1 bitcoin equals $8741.81 dollars, and 1 ether equals $190.00.
The Future of Cryptocurrency
The world is clearly divided when it comes to cryptocurrencies. On one side are supporters such as Bill Gates, Al Gore and Richard Branson, who say that cryptocurrencies are better than regular currencies.
On the other side are people such as Warren Buffet, Paul Krugman, and Robert Shiller, who are against it.
Krugman and Shiller, who are both Nobel Prize winners in the field of economics, call it a Ponzi scheme and a means for criminal activities.
In the future, there’s going to be a conflict between regulation and anonymity. Since several cryptocurrencies have been linked with terrorist attacks, governments would want to regulate how cryptocurrencies work. On the other hand, the main emphasis of cryptocurrencies is to ensure that users remain anonymous.
Futurists believe that by the year 2030, cryptocurrencies will occupy 25 percent of national currencies, which means a significant chunk of the world would start believing in cryptocurrency as a mode of transaction. It’s going to be increasingly accepted by merchants and customers, and it will continue to have a volatile nature, which means prices will continue to fluctuate, as they have been doing for the past few years.
That wraps up our cryptocurrency tutorial. If you’d to learn more about blockchain (the underlying technology of cryptocurrencies such as bitcoin), check out Simplilearn’s Blockchain Basics Course. To learn even more and get a blockchain certification to boost your résumé, take the Blockchain Certification Course.
The Benefits of Cryptocurrency • Trading Crypto • Benzinga
Many people think of cryptocurrency as a simple store of value, but there is much more to the idea. Bitcoin is rooted in “financial rebellion,” not as another way to pay for a pizza.
There are many benefits implied within a decentralized, trustless, immutable system of record-keeping and value transference.
Political and financial leaders around the world are taking note, and you should as well.
Even if you don’t plan to get involved in cryptocurrency as anything more than a portfolio hedge, you’ll definitely enjoy knowing just how crypto will change the financial and political world of the future.
Better Payment Structure
If you have ever been annoyed waiting for a cash transfer from a bank account, you may want to consider using crypto. Transfers are instant with lower fees than platforms Paypal. Using crypto also eliminates fraudulent chargebacks because payments on a blockchain cannot be reversed.
Using crypto also frees you to send money wherever you want with no middleman scrutinizing your transaction history. This includes international recipients who will also happily avoid Paypal’s expensive currency conversion fees.
The concept of the micropayment, or pay as you go, on-demand payment structure, is another advantage of using cryptocurrency.
The built-in fees that you pay when using a credit card disappear with crypto, making per-second or per-minute micropayments a reality.
Instead of paying a subscription fee for a streaming service, for example, crypto allows you to pay only when you watch a movie. As a matter of fact, Streamium is a video streaming service that does just that.
Even if you’re not a huge crypto buff, you ly heard of the Bitcoin mania that took place around Christmas 2017. Bitcoin exploded in value, almost touching $20,000 USD per coin.
At that time, it was literally the best financial investment of all time.
Bitcoin’s value relative to the dollar has receded since then, but crypto bulls believe it can top its 2017 performance and bring the rest of the crypto market with it.
More investors than ever — both individuals and institutions — are holding some sort of crypto in a portfolio. This includes very public crypto skeptics Jamie Dimon, CEO of JPMorgan Chase.
The Chicago Mercantile Exchange (CME) offers options on Bitcoin futures, giving the market mainstream viability it didn’t have before its breakout 2017 year.
The crypto market has all of the markings of a solid potential growth investment: rising visibility and sentiment, a relatively low market cap compared to traditional asset classes and consistently increasing utility.
Many investors in the U.S. think of crypto as a volatile investment. This may be because the U.S. dollar is the world’s reserve currency and still one of the most stable currencies on the planet.
To a country Venezuela, crypto actually represents a more stable form of money.
This notion is more than a pipe dream or an experiment — Nigeria, Australia, Spain and Canada have all doubled their use of Bitcoin year over year.
In countries Venezuela, the population is literally using Bitcoin to save its life. The government cannot exercise nearly as much control over cryptocurrency as it can a fiat currency. Russia is trying to create its own crypto and criminalize any other nonsanctioned competitor. The people of Zimbabwe prefer crypto to the gold-backed currency the government is pushing.
Imagine never having to pay a lawyer to do good business again. Imagine a real estate transaction with no escrow fees. This is a world that proponents of Ethereum say is quite possible.
The smart contract, built on the Ethereum platform and quantified through the Ether cryptocurrency, brings the unchangeable, fraudless blockchain into the realm of law.
Smart contracts create a 100% safe way to conduct an agreement sans the judicial system.
The idea of smart contracts is so well received that Ethereum has actually outpaced Bitcoin in terms of new users over the past year. Ethereum developers say that Ethereum will soon beat Bitcoin in the number of developers, daily value transfers and transactions per second.
and have recently created controversy because of their willingness to police its platform. Depending on who you ask, we lose. One of the inventive uses of cryptocurrency is to serve as the basis of a decentralized social network. In this structure, there is no central authority to blame for censoring or not censoring controversial content.
Decentralized social media also gets rid of the data privacy controversy because there is no central authority present to gather and sell private data. Cryptocurrency micropayments replace invasive ads as the platform’s funding mechanism. Spam is still unwelcome, but it is moderated through a smart contract rather than a mod, who can be influenced to be subjective.
To get the most crypto, you need to be able to get your hands on more than 1 kind of coin. You can do this most efficiently through a trading platform. Take a look at the feature sets of the brokers below.
There’s More to Life Than Money
Although you may certainly use Bitcoin, Ether or altcoin as cash, the real benefits of crypto are much broader.
Even if the current generation of cryptocurrencies phases out as money, the social and financial ideas they brought to the mainstream cannot quickly be forgotten.
The ideas mentioned above represent only the tip of the digital iceberg in terms of potential social and financial utility.
Avail yourself of the more technical benefits of value stores, smart contracts and other crypto utilities. They will certainly play a major part in people’s lives in the very near future.
The more you learn today about what crypto can really do, the more your life will benefit tomorrow.
You may even be inspired to create a use of your own for cryptocurrency in this still quite new and wide-open space.
Gemini builds crypto products to help you buy, sell, and store your bitcoin and cryptocurrency.
You can buy bitcoin and crypto instantly and access all the tools you need to understand the crypto market and start investing, all through one clear, attractive interface.
Gemini Crypto Platform offers excellent account management options. You can manage your account at a glance, view your account balance 24-hour changes and percent changes. Get started with Gemini now.