Also known as criptodivisas or virtual currencies, cryptocurrencies are an authentic means of payment in an electronic form that have come to light in the new digital era. In the last few years, this form of digital currency has gained a lot of popularity and are quickly becoming the standard payment method online. There are numerous renowned cryptocurrencies such as Bitcoin, Dash, Ethereum, Ripple, Litecoin, Dogecoin, Peercoin and Quark amongst others, but the most commercialized ones are Bitcoin and Ethereum. As far as the price of cryptocurrencies is concerned, it tends to fluctuate over time because it is dependent on the factors of supply and demand.
However, they are being regarded as a store of value because most cryptocurrencies such as Bitcoin have a cap, which means that demand is eventually going to exceed supply. This, in turn, will boost the price of cryptocurrencies in the long run. However, there is also another school of thought that regards cryptocurrencies as a financial medium for those who indulge in criminal activities. Moreover, the lack of regulation in the crypto market also makes investors hesitate when they are thinking about investing their money in it. But, the good news is that the widespread use of cryptocurrencies in different industries has prompted governments to take interest and there is a strong change that cryptocurrencies will eventually be regulated.
Therefore, as Guy Galboiz has said, investing your money in cryptocurrencies can be a wise decision. If you are still on the fence, here are some excellent merits of considering them an investment vehicle:
Ease of Transactions
When traditional business dealings are being conducted, significant expense and complications can be added by brokers, legal representatives and agents, even though it is nothing less than a straightforward and simple transaction. There are commissions, brokerage fees, paperwork and a number of other special conditions that might be applicable. This is where cryptocurrencies can be beneficial because their biggest advantage is that their transactions are one-to-one affairs.
The middle man is cut out of the transaction, which follows a peer-to-peer networking structure. This can be incredibly helpful because it promotes greater accountability as both parties involved in the transaction are aware of each other’s identity, there is no confusion about what needs to be paid and to whom and there is also a great deal more clarity in creating audit trails.
Experts and analysts have described the cryptocurrency blockchain to be similar to a large database of property rights. On one level, this database can be used for enforcing and executing two-party contracts on commodities such as real estate and automobiles. However, the cryptocurrency blockchain ecosystem can also be used for facilitating specialist modes of transfer. For instance, it is possible to design cryptocurrency contracts that include third party approvals, are to be completed at a specified time and date in the future or can also refer to external facts. The expense and time that’s usually involved in making these asset transfers is considerably reduced as the cryptocurrency holder has exclusive control over their account and there is no outside interference. As per Guy Galboiz, these smart contracts have contributed considerably to the overall popularity of cryptocurrencies.
If you are using a credit or cash system, your whole transaction history can be used as a reference document by the credit agency or bank involved and this happens every time you make a transaction. At the most basic level, this can refer to a check of your account balance to ensure you have enough funds available whereas in the case of business-critical and complex transactions, your financial history may be examined more thoroughly.
One of the greatest benefits of cryptocurrency transactions is that every single one of them is basically a unique exchange between two parties and in each case, they can negotiate the terms until they agree. Furthermore, a ‘push’ basis is used for the exchange of information, which means that you will only share what you want with the recipient and no other information will be transmitted. In this way, a cryptocurrency transaction is better able to guard your financial history’s privacy and can provide better security from the risk of identity or account theft. These risks are considerably higher in the traditional system as your information may be exposed at any point during the transaction.
Greater Access to Credit
The exchange in cryptocurrencies is facilitated by the mediums of internet and digital data transfers. Thus, this means that these services can be accessed easily be anyone who has some basic knowledge of what the cryptocurrency network has to offer, a viable data connection and ready access to cryptocurrency portals and websites. According to estimates, there are approximately 2.2 billion people in the world with access to mobile phones and the internet right now, but don’t have access to the traditional systems of exchange and banking.
This is a huge market of potential and willing customers and the cryptocurrency ecosystem can make transaction processing and asset transfer possible for them.
If you go through the monthly account statements of your credit card company or bank, you will definitely balk at the amount of fees they charge for transferring funds, writing checks or doing anything in the general direction of these finance houses. In a nutshell, these transaction fees can end up eating a huge chunk of your money, especially when you are conducting a large number of transactions on a monthly basis.
In the world of cryptocurrencies, the data miners who are responsible for the number crunching that generates cryptocurrencies, such as Bitcoin, get their compensation from the cryptocurrency network in question, it eliminates the need for transaction fees.
In the case that you engage the services of a third party for maintaining your cryptocurrency wallet, you may have to bear some external fees. Nonetheless, one advantage of cryptocurrencies is that the fees involved are still going to be much less than the transaction charges imposed in traditional financial systems.
When you are using a traditional credit card or banking system, you are essentially giving the stewardship of your money to a third party that can have the power of life and death over your funds. Infringement of the Terms of Service of a financial institution means that your account might be closed without prior notice, which requires the account holder to have to jump through hoops in order to get back into the system again.
Perhaps, this is the greatest benefit that an investment in cryptocurrencies has to offer to the investors; unless you have hired a third party service for managing your wallet, you remain the sole owner. The corresponding public and private encryption keys that are part of your cryptocurrency network address or identity only belong to you and no one else.
Easier International Trade
At present, cryptocurrencies may not be largely recognized or accepted as legal tender at national levels, the nature of this instrument means that they are not subjected to any interest rates, exchange rates, transaction charges or other charges imposed by a specific country. Furthermore, when the peer-to-peer mechanism of the blockchain technology is used, cross-border transactions and transfers can be conducted without any problems in terms of currency exchange fluctuations and more. According to Guy Galboiz, this will promote the adoption of cryptocurrencies in international trade.
Credit card companies allow ‘charge-back’ transactions, but this is not something that can be involved in cryptocurrency transactions. Once it has been authorized, there is no way to reverse it, which can be a hedge against fraud. A specific agreement has to be made between buyers and sellers regarding refunds in the case of a returns policy or a refund. Moreover, the encryption techniques that are implemented throughout the distributed ledger i.e. blockchain and in each cryptocurrency transaction are an excellent safeguard against account tampering and fraud and can guarantee consumer privacy.
As mentioned above, there are a large number of cryptocurrencies and altcoins that are circulating all over the world and as stated by Guy Galboiz, there are going to be more. While plenty of them are ephemeral, there is a significant portion that has been created for being used in specific cases. This is an excellent example of the flexibility offered by cryptocurrencies. For instance, you will be able to find ‘privacy coins’ that can be used for concealing your identity on the blockchain. Likewise, there are also supply chain tokens that are great for facilitating supply chain operations for a multitude of industries.
Easy and Fast Payments
It is very easy to make payments in the form of cryptocurrencies and it takes only a few seconds for you to make the transaction. The reason this process is fast is because you don’t need to have a lot of details and there is no need for you to enter your credit or debit card details either. The only information that you do need for conducting transactions is the address of the wallet of the enterprise or individual to whom you want to make a payment. Depending on the cryptocurrency you use, the amount is credited to the recipient within a few seconds or minutes.
Another great merit of cryptocurrencies is that you don’t have to wait for days for receiving the money. Blockchain, the technology on which cryptocurrencies are based, removes payment of fees, delays and a host of other steps involving third party approval that are involved in traditional systems. Traditional businesses have to face a number of bottlenecks and hiccups due to the number of middlemen involved, but as these middle men are eliminated with cryptocurrencies, the settlements are very quick.
No Risk of Counterfeits
When you are using cryptocurrencies, you don’t have to deal with the hassle of trying to decipher counterfeited coins and notes as this is a digital currency and there is no physical cash involved. Since it is virtual cash, an exchange of cryptocurrencies can only be made online. There is no need for investors to worry as it promises and also ensures a transparent and fair process.
On the other hand, problems of counterfeits has always been found in cases where physical cash is involved and every single currency has been saddled with this problem at one point or another. This can be detrimental for businesses, individuals and the economy as a whole. With cryptocurrency, it has become possible to bridge this gap and make a greater number of currencies available without worrying about counterfeits.
No Government Regulation
As cryptocurrencies don’t have a central system, they are not under any government regulation. This means that there are no policies involved, currencies are able to retain their value in transactions and there is no undue inflation either. In addition, there are no limits to how many cryptocurrencies you can invest in or what you can do with them. Also, as there is no central bank for controlling international transactions in cryptocurrencies, it has become easier to use them for this purpose.
This is also one of the greatest merits of investing in cryptocurrencies. They speak one universal language and are based on a single technology; blockchain. This paves the way for easy transactions between people in different countries because it saves them from the stress of converting one currency into another. Therefore, the use of these cryptocurrencies is making it easier for a business to join hands with foreign businesses.
Last, but definitely not the least, cryptocurrency gives you the option of staying anonymous. A proxy ID protects your original ID. Staying anonymous can keep your identity safe from risks such as identity theft and is also a great way to ensure privacy if you don’t want others to know what transactions you make.
As per Guy Galboiz and other experts, cryptocurrencies are here to stay an investing in them can be a good move for anyone looking for high returns.