Cryptocurrency: a huge potential of the modern digital asset
Cryptocurrency is a type of digital asset which is based on a distributed computing concept. The concept involves complex computational tasks which, as a rule, employ the powers of several computers or special mining farms at once. More and more people invest real money into cryptocurrency assets by the day, so the most prominent currencies of this type (bitcoin, ether, litecoin, etc.) have quite a firm financial grounding. In particular, global capitalization of all cryptocurrency had passed the US $610 billion mark by the end of 2017. The popular bitcoin, experiencing occasional drops and rises in the currency exchange rate, has grown by more than 17(!) times in just last year. All that means one thing – digital currency is a very profitable asset from the commercial perspective.
Are there any risks whatsoever?
Many potential investors are a bit alerted by the rapid growth of prices for the cryptocurrency. They refuse to purchase it grounding such decision on the digital assets’ alleged resemblance to a concept of financial pyramids. However, such comparisons are absolutely groundless. Financial pyramid’s main goal is to establish the means of getting profit for its participants who attracted other people to buy its assets which are invaluable on the exterior market. Cryptocurrency is a completely different case. It’s profitable as it is because it resolves such ordinary bank money transfers problems as time delays, large fees, an absence of anonymity, and, sometimes, unreliability.
For instance, if you want to transfer your uncle in Mexico $100 via an ordinary bank, you will have to first fill out a special form; the bank will then get the money from your account and transfer it to the global account for all international transfers. Afterwards, the bank employee transfers the money to the Mexican bank account and, having passed yet another, similar set of processes, it gets to your uncle’s account with the fee already held back. Usually, such a procedure takes 3-7 working days (depending on the sum of transfer) and is accompanied by significant transactional charges. As opposed, a cryptocurrency transfer is:
anonymous, as a digital wallet that holds the money is not attached to the owner’s name;
secure, as all the transfers happen via blockchain – a chain of data, each sector of which acts as the other stage of money transfer and which is, also, protected by a digital key and is stored on separate computers;
fast, regardless of the amount of money, blockchain transactions take as much as a couple hours;
and it features minimal fees.
Can cryptocurrency be as practical as real money?
The increasing number of world-renowned marketplaces (e.g. Amazon, WordPress, Microsoft, Shopify, etc.) decides to implement a cryptocurrency payment option. It’s just a matter of time before this type of transactional activity is commonly accepted and accessible and can be used for any kind of commerce.