Cryptocurrencies are independent of central banks and governments. Unlike traditional money, which the state can “print”, most cryptos have a limited supply. Crypto prices also don’t depend on these factors. Bitcoin has a total supply of 21 million, which can act as a hedge against inflation.
If you are wondering what is cryptocurrency and what are its benefits, this article is for you.
Protection against inflation
Cryptocurrencies are independent of central banks and governments. Unlike traditional money, which the state can “print”, most cryptocurrencies have a limited supply. Crypto prices also don’t depend on these factors. For example, Bitcoin has a total supply of 21 million, which can act as a hedge against inflation.
Safety and confidentiality
Crypto transactions are secure and private thanks to blockchain technology specifically designed to make it nearly impossible to steal customers’ personal information. When you decide to buy and sell crypto, rest assured that your financial details are well-protected.
The more computing power is added to the network, the more secure it becomes and the more manpower and resources are needed to attack it. Thus, attacks on the popular Bitcoin or Ethereum blockchains would be extremely expensive.
Decentralized nature
The value of traditional money is determined by the government and regulators. In the case of most cryptocurrencies, the value is determined by the people who own most of these coins.
Decentralization eliminates the risk of interference and manipulation by governments and financial institutions.
No intermediaries
Transactions take place directly between network members without the participation of intermediaries such as banks and financial institutions. As a result, the amount of costs for conducting transactions and controlling the actions of participants in the transaction is reduced. So, if you decide to buy crypto, the fees won’t be as high.
Availability
The process of creating a cryptocurrency wallet is a lot easier than opening a bank account. A cryptocurrency wallet does not require identity verification, creditworthiness, etc.
There are many reasons why a person cannot or does not want to get a traditional bank account. Cryptocurrency opens up access to financial services for individuals who usually do not have access to banking services.
You can buy or sell cryptocurrency 24/7. By the way, this is largely why cryptocurrencies are so popular among traders.
Transparency
Blockchains are very public. There are tools with which you can view all the transaction data: when and how much cryptocurrency was sent, how much cryptocurrency is left in the wallet, etc. This level of transparency greatly reduces the risk of fraud.
As you can see, there are a lot of advantages of cryptocurrency. There are, of course, some disadvantages of cryptocurrency. That’s why you need to do your research before investing.
