In 2009, the world was first introduced to the concept of cryptocurrencies with the emergence of bitcoin. These digital or virtual currencies have no centralized regulating authority, meaning that it is created and transferred without any bank intermediaries.
While cryptocurrency has been around for a while, the concept is still relatively new and, hence, misunderstood by many. From being used for illegal purchases to being considered fraud, many misconceptions are surrounding these virtual currencies.
However, the perception is now changing as more people begin using cryptocurrencies and a crypto-friendly bank account helps make crypto transactions easier than before. Typically, banks flag any transactions bearing any resemblance with crypto, making the entire process a hassle. However, crypto-friendly banks will ensure your account isn’t closed and will support your crypto business.
Fundamentally, cryptocurrencies are just virtual currencies that use digital files as money by using the internet as a medium of exchange to execute financial transactions through cryptographic algorithms. A public blockchain tracks and keeps financial transactions secure.
Types of Cryptocurrencies
Today, there are over 2,500 active cryptocurrencies, the majority of which act as more than simple payment systems. Four of the most popular are:
Bitcoin: Bitcoin is easily the most recognizable kind of cryptocurrency. It’s been around for almost 11 years now, and, in 2020, research founded its market capitalization rate value at $117.8 billion.
Litecoin: Litecoin was created in 2011 and is easily considered the silver in the cryptocurrency world, where bitcoin is considered gold. Litecoin is considered more flexible since it was created as a lighter currency for daily transactions.
XRP: Created by Ripple, XRP was founded in 2012 to expedite global payments and, more specifically, cross-border payments. Instead, the currency itself doesn’t hold any real value and is typically used as a token against span and a currency transfer tool.
Ether: Through ether, the ethereum network hosts a decentralized payment and computer system. While ether typically works as a cryptocurrency, it’s used to pay transaction fees and services.
How Can You Buy Cryptocurrencies?
Since cryptocurrencies have gained traction, it’s relatively simple to purchase cryptocurrencies. You can either get them from a crypto ATM or buy coins from an exchange. Most people prefer the latter since they work like stock exchanges where you can purchase or sell crypto funds.
On the other hand, at a crypto ATM, you can pick up various cryptocurrencies by receiving confirmation and private keys through which you can use to transfer or sell your crypto funds whenever you want later.
How Can You Use Cryptocurrencies?
Not many people know this, but there are a variety of ways you can use cryptocurrencies. These ways include:
Invest in early-stage startups: The rise of cryptocurrencies has given way to initial coin offerings (ICOs), a form of fundraising that works similar to IPOs. It allows startups to raise capital by selling newly-created digital tokens to project backers in exchange for cryptocurrencies such as ether or bitcoin.
Payment for content posting: Steemit is the world’s first incentivized blogging and social media platform that allows publishers to gain cryptocurrency financial rewards in exchange for content curation and posting.
Travel: Due to the popularity of cryptocurrencies today, many travel agencies, such as Expedia and Destinia, accept payments in the form of crypto. Airlines such as Virgin Air and Norwegian Air are also accepting various cryptocurrencies.
Managing wealth: You can also use cryptocurrency for wealth management. Companies like SwissBorg pave the way for investment opportunities by allowing investors to manage their wealth without any restrictions or boundaries.
Everyday purchases: Cryptocurrencies are now being used as payment currency for daily transactions. Many places now accept cryptocurrencies as payment, from purchasing electronics on Newegg to ordering food from Just Eats.
Advantages Of Cryptocurrencies
There’s a reason people are increasingly using cryptocurrencies for simple purchases such as food and electronics. It’s because it offers a variety of advantages, such as:
Transparency
Once a transaction is complete, the payment you make or receive is uploaded through the entire crypto network. The blockchain technology, that’s undeniably an advantage of cryptocurrencies, helps create a transparent financial system. Additionally, since every user on the blockchain network uses a pseudonym, transactions remain anonymous, and no one finds out.
Decentralization
There is no regulatory authority that controls cryptocurrencies, due to which all transactions have zero interference from government jurisprudence and interference. Moreover, the demand and supply of cryptocurrencies aren’t affected by government or bank regulations.
No Geographic Limitations
While there are countries that are more friendly towards crypto transactions than others, unlike others that ban them outright, making cross-border transactions doesn’t impact the overall value of your transactions. Hence, they’re unaffected by the exchange rate and currency fluctuations.
Cheap
Crypto transactions use public and private encryption and occur between two users directly. This ensures you don’t incur any significant transaction fees typically charged by other financial institutions.
Final Thoughts
The world of cryptocurrency is growing fast. The younger generation is increasingly accepting this new technology as the digital currency moves towards widespread use. The ongoing pandemic is expected to accelerate its usage as more people use crypto for everyday transactions.
Additionally, cryptocurrencies also allow investors to diversify their portfolios. These opportunities ensure that crypto will gain even more acceptance in the future as different institutions, including governments and banks, realize the potential of adopting this technology instead of opposing it. This adoption will result in a general acceptability of cryptocurrencies, paving the way for more ways to use it.
