Cryptocurrency has only existed since 2009. In that short time period, the crypto market has surged to more than $3 trillion in value.
Due to the decentralized nature of crypto, it’s ushering in a financial revolution, one that aims on bringing financial control back to the people, rather than the institutions.
Still, relatively few people use crypto on a regular basis. There’s so much that crypto can do currently, and so much in store for the future.
Yes, you can invest in it. And you can even use it to make purchases, but what are some of the other benefits of cryptocurrency?
Crypto Is Programmable, Digital Money
Fiat currencies were originally used to represent an asset, such as gold, as is the case with the US dollar. Today, the US dollar represents debt. It’s an IOU that’s used as a form of exchange.
It’s not native to the internet, and it needs a massive overhaul.
That’s where cryptocurrency comes in. A cryptocurrency is a digital form of currency, native to the internet, making it extremely efficient in the 21st century.
And it’s programmable, as well. Just like software, you can program crypto to solve problems.
This allows for the use of “smart contracts.” These are contracts created by computer code, that can operate without having to pay a middleman. They go into effect when pre-determined conditions are met.
You can use smart contracts to automatically complete actions, such as paying royalties to artists if their work sells on the secondary market, for example.
Crypto Gives Individuals True Financial Control
One of the main advantages of cryptocurrency, compared to fiat currencies like the US dollar, or traditional investment vehicles like stocks and bonds, is decentralization.
There is no governing authority that controls a cryptocurrency. There is no entity or person, or even government, that can manipulate or devalue a cryptocurrency.
Crypto is essentially controlled by the market alone. Individuals all over the globe who participate in either mining or staking activities are those who secure the network.
And transactions do not need to be facilitated by a bank or payment processor. That means there isn’t anyone who can censor or block transactions. This puts financial control into the hands of the individual, rather than the hands of a government or central bank.
Cryptocurrency Is Near Impossible to Counterfeit
Cryptocurrency runs on blockchain technology. The blockchain is essentially a digital ledger of transactions that is open and accessible to the public.
Thanks to this design, cryptocurrencies are nearly impossible to forge or counterfeit. In order for a transaction to complete, it needs to be recorded in a block on the blockchain.
For this to take place, individual nodes around the world are running the cryptocurrency software on high-powered computers to verify the blocks of transactions, comparing the transactions with other nodes running the software.
Every node has to agree on the list of transactions before they are posted. This makes it near impossible to add faulty transactions, where a hacker might try to double-spend their crypto and walk away with “free” money.
Simple, Digital Payments
One of the most basic use cases of cryptocurrency, of course, is that you can use crypto to buy things. What can I buy with cryptocurrency right now?
You can buy goods from physical retailers. You can buy goods online, as many websites accept crypto as a form of payment. You can buy event tickets, and software applications, access specific websites, and much more.
You can even buy a Tesla all-electric vehicle!
When using crypto to make a transaction, you don’t need to provide personal information (unless a specific company chooses to collect that). No credit card details or billing addresses are needed. All you need is the wallet address of the receiver to send crypto right now.
The use of crypto as a form of payment helps to protect sensitive information. Since countless companies fall victim to cyberattacks every year, this means less chance of cybercriminals collecting your confidential information.
You can send a cryptocurrency transaction using nothing but your crypto wallet address. Since these are long strings of characters, not attached to an account, an email address, or a name, your transaction can remain anonymous.
This opens the door for people to donate to charitable organizations that would prefer to remain anonymous.
More and more charitable organizations are setting up crypto wallets in order to receive donations in the form of bitcoin, Ethereum, and other popular cryptocurrencies.
Wondering how to use cryptocurrency for maximum benefits? Just buy and hold. Cryptocurrency is the best-performing asset class of all time.
Bitcoin was released in 2009, and the first bitcoins were given away for free. Eventually, they were trading for fractions of a cent, and then a few cents per bitcoin. In November 2021, Bitcoin hit $70,000 in value.
Likewise, Ethereum, the second most popular cryptocurrency, launched in 2015 and first traded for $2.77. In the same bull run of 2021, Ethereum peaked at $4,800.
Where in the stock market could you have seen returns of that size in just a few years? However, before you dump money into crypto, know that it is an extremely volatile market.
The high levels of volatility scare many would-be investors away, as values can dip or rise 25% in a single day.
If you know how to weather a storm, crypto is a great investment class for hedging against inflation and experiencing sky-high returns.
Send Money Internationally
Fiat currency has borders. While the US dollar is widely accepted in many parts of the world, most currencies are restricted to their country of origin.
Sending money from one country to another can be very costly and very time-consuming. It can take days for funds to move from one bank to another.
But with cryptocurrency, it doesn’t matter if you’re one block away, or halfway around the globe. We can send and receive cryptocurrency in a matter of seconds or minutes, for fractions of a cent, depending on the cryptocurrency used.
No middleman is required and very few fees are placed on the users.
Enjoying the Many Benefits of Cryptocurrency?
A cryptocurrency is a digital form of currency. But it can do far more than traditional currencies can do. There are many benefits of cryptocurrency, and countless ways you can use it to take control of your finances.
This just scratches the surface of what crypto can do. Want to learn more about getting started with cryptocurrency? Check out our ultimate guide here.
Frequently Asked Questions:
- Investing in crypto assets is risky, but can be a good investment if you do it properly and as part of a diversified portfolio. Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency.