In 2019, Bitcoin introduced the world to a new form of legal tender in crypto – a digital form of currency that is acceptable for the payment of goods and services through an online ledger based on a cryptography that secures the online transactions.
After its introduction, many critics – especially those who favoured traditional banking and financial principles prophesied an early death for Bitcoin. They waved off the idea that more digital coins would emerge.
Today, it is obvious which prophecies came true and which didn’t. In a report by international statistics giants – Statista, there are nearly over 6,000 cryptocurrencies, and more are in the pipeline, billed to be released before the end of the year. One reason behind the wide acceptance of digital coins across the globe is the high level of security and privacy it offers users as against the traditional currency and banking models.
Through a highly encrypted end-to-end algorithm, crypto currency creators have successfully offered an option that boasts seamless transactions and the highest level of privacy. Crypto currency platforms do not employ the services of third parties when handling transactions. Hence there is no traceable blueprint – something which many enthusiast claims is the real reason behind the wild acceptability of the coins worldwide.
But how have these digital coins impacted the global economy when viewed from a critical point of view backed by market trends and fluctuations.
How has Crypto Currency Impacted Global Economy?
With crypto, transactions are initiated directly between buyers and sellers – thus eliminating the activities of financial agencies and stakeholders who play the role of intermediaries. Apart from reducing the processing time for completing transactions, crypto offers low transaction fees and more efficient processing time through its Blockchain technology.
In addition to this, it has helped boost entrepreneurship across the globe in no small way by providing an opportunity for them to access international markets regardless of the bottlenecks and pitfalls evident in their local financial sectors.
Crypto has also improved the global economy by opening new market opportunities we never thought possible and empowering everyday individuals to reach for the zenith through their dreams.
Today, an entrepreneur in a developing country is not limited to creating products for his immediate environment through crypto. Instead, they can target international customers whom they can offer services and design products for, while receiving payments in real-time without all the restrictions of international financial policies.
According to reports, a single crypto currency records as much as 1.1 million transactions daily. This, experts say, contributes immensely to boosting the foreign exchange sector and global economy.
Challenges of Crypto Currency
Despite its numerous advantages and immense contribution to improving the global economy, there are some challenges that crypto continues to battle. According to experts, these challenges are posing a significant threat to the sustainability of crypto.
In trying to make transactions seamless, digital currency creators offer little or no protection to buyers and users. As a result, there is a high level of fraud which continues to reduce investor confidence in the coins. Crypto currency currently records the highest ratio of scams and losses, which affects acceptability and threatens its sustainability.
The rate at which crypto continues to gather market relevance has shocked many, and stakeholders say there is more to come. With new coins being released daily and demand increasing, there is little to doubt in the impact crypto can have on the global economy within the next few years.
Though there remains a lot to be done, experts say the future looks bright – but for how long? Only time can tell!