Is Crypto the Future?

Recently cryptocurrency has soared after a rocky 2023. As I’m writing this, bitcoin is currently at 63,955.00 USD which compared to a year ago is up an astounding 185%. Good luck finding those returns in the stock market, I’ll wait…

These bank failures create loads of questions but mainly, trust issues. People start to wonder if they can trust the banking system after these failures. So, with the growth of a “decentralized financial system,” what is it? How do the people benefit from it?

First off, cryptocurrencies and blockchains are all still in their raw stages. They are a relatively new concept although they attempt to eliminate the fees that banks and other financial and investment services charge and instead promote other forms of transactions. These other forms of transactions mainly involve peer to peer transactions. They avoid any need for a third party, hence why they mainly involve P to P transactions.

So let’s get to it, here are the benefits of cryptocurrency:

• Decentralization – no longer being controlled by the government or a central bank system thus reducing risk of censorship and control.
• Lower fees – when compared to banks and other financial services, the fees are much lower, especially when it comes to international transactions
• Efficiency and Accessibility – Cryptocurrency transactions are faster when compared to bank transfers and all you need for access is an internet connection 😊

Where there are positives, there are always negatives…

• Volatility – if you haven’t noticed already, the prices fluctuate significantly over short periods of time.  This can be an advantage, but it can also lead to losses as it makes for an extremely unreliable/unpredictable pattern.
• Environmental impact – cryptocurrency involves a mining process, not physically either but instead through electricity, powering this is the main concern for many environmentalists.
• Security risks – with a lack of a centralized system, there is a lack of regulations and other risks. For example, people losing money due to exchanges being hacked.
• Limited acceptance rate – as it’s relatively new, crypto is not universally accepted as a payment form for many businesses, limiting its use for your everyday transactions.

Before you do anything, you need to understand the risk it involved; you wouldn’t be researching crypto if you weren’t a little nervous before investing. Don’t blame you, with reward comes risk, so…is crypto the future?