With time, new technologies are emerging in our world, and these technologies have a great impact on us. Cryptocurrencies are another amazing invention that will transform our life. But do you know the real importance of cryptocurrencies in today’s world?
Even though cryptocurrency has emerged in the market in the last few years, still many people are quite unaware of the implications of cryptocurrency in the financial sector. Cryptocurrency has completely revolutionized the way through which we buy and sell products or services. With just a few clicks, you can get goods from distant locations of the world at a very minimal cost.
The most fascinating aspect of cryptocurrencies is that you don’t need to worry about bureaucratic involvement because unlike traditional money (like US dollars, Euro, etc. ) most cryptocurrencies are decentralized.
Cryptocurrency by definition is a peer-to-peer electronic cash transfer system that doesn’t rely on any central regulatory authority.
In this short and brief article on the importance of cryptocurrency, I’ll be discussing the most fascinating aspect of it.
1. Independence of Any Central Bank or the Government
As I mentioned earlier, if you use cryptocurrencies as a medium of the transaction then the transaction itself is completely decentralized in nature. In other words, we can say that transactions involving cryptocurrency are independent of any governing or legislative body.
2. Secure Transactions
Since the distributive ledger keeps the track record of all the transactions, there is no space left for security vulnerability. Every individual within the blockchain network keeps a copy of the ledger. That is why there is no need to rely on any central system because every transaction is individually stored on this ledger. The decentralized distributive ledger of the blockchain makes the cryptocurrency less vulnerable to hacking, bugs, and system failure.
3. Transactions Are Irreversible
Cryptocurrency transactions are completely irreversible and immutable. The immutable and irreversible nature of the cryptocurrency ensures that no one can modify the transaction once it is recorded on the blockchain. Only the owner of the respected private key has the right to move his digital assets. Secure hash value generated by the cryptographic has an algorithm makes the modification of the cryptocurrency transaction almost impossible.
4. Low-Cost Transaction
Since the cryptocurrency is the peer-to-peer electronic cash transfer system so there is no need to rely on any central regulatory body to process the transaction. Users can buy the products or services from each other using for example Bitcoin as a medium of exchange. Each transaction gets successfully added to the blockchain. Everyone who has an internet connection can use cryptocurrency as a medium of exchange. Aside from all these benefits, the cost associated with cryptocurrency transactions is relatively low as compared to the traditional currency transactions. Some cryptocurrencies don’t have any transaction costs at all.
5. Fast Transactions
It just requires a few minutes for the execution of a transaction within the blockchain network. Cryptocurrency transaction speeds are completely different than those of your traditional currencies. Crypto transactions happen on a global network of computers. If you send a cryptocurrency to your friend living in your neighbor or on the other side of the world, the transaction takes the same time.
The cryptocurrency market is consistently evolving. With the advent of new improved cryptocurrencies, probably the conventional fiat currencies will disappear. Maybe, people all over the world are going to buy Bitcoin or other cryptocurrencies to save themselves from the massive depreciation of their national currencies. Only time will tell.