Though the word alone can drum up a bit of confusion, cryptocurrency has quickly become a debated topic throughout the public. From Bitcoin, to Dash, to Litecoin, there are a surprisingly large number of providers throughout the web. First, it’s best to define cryptocurrency for a better understanding of what it exactly is.
Cryptocurrency is a digital form of money designed to remain anonymous for more security. It is associated with cryptography, hence the name. This practice converts written information into nearly untraceable code for purchases and transfers. Bitcoin was the first company to break out onto the scene, and it was almost immediately seen as a potential replacement for cash as we know it. However, many argue that this is a passing fad.
Given the current state of the economy and how questionable it can be at times, cash is never an absolutely guaranteed safe investment. While it is highly unlikely that the markets crash tomorrow, putting all of your trust in your bank is somewhat of a gamble.
With cryptocurrency, fraud becomes obsolete. Because all transactions are digital, this online cash cannot be counterfeited or reversed suddenly by the individuals transferring the money. Similarly, having your identity stolen becomes nearly impossible through cryptocurrency transactions. Unlike credit cards, which display your credit history in its entirety, platforms like Bitcoin use allow you to send exact payments to whomever it is you are purchasing from without releasing any other piece of information.
Perhaps one of the biggest benefits that comes with cryptocurrency is its widespread availability. Not everyone has the financial security of working with a bank, but nearly 4 billion people have internet access today, which is the prime demographic of cryptocurrency. Whether it is through desktop computers or mobile devices, billions of people can take advantage of these convenient transactions at any time.
There is quite a long road ahead for cryptocurrency before it becomes the staple of financial trading and investments, largely due to just how new it is and how unfamiliar the world is with it. Because of this, it requires quite a bit of education for those who are new to the field, and for businesses that have yet to implement it.
While cryptocurrency can protect from fraudulent activity, it is often considered less secure due to the risk of basic human error, i.e. usernames and passwords. Technical glitches are always possible as well, which can result failed transactions, or worse; lost funds.
The size and speed of your transactions are fairly limited through cryptocurrency as well. Many companies like Bitcoin put a cap on how much money you can transfer, and how many in a given period of time. Credit cards on the other hand, allow individuals to make much larger, more frequent purchases, further backing up the claim that cryptocurrency may not replace traditional payment methods in the future.