A few years ago, I wrote the first article on bitcoins. It was long before they became the new big thing. Bitcoins were a thing for geeks, a subsection of the population. Most people had no idea what cryptocurrencies were. Today every mainstream newspaper and magazine talks about bitcoins. Too often, it is evident that they are still not really part of the mainstream. “Expert” journals describe the way they work incorrectly, draw really strange conclusions or elaborate on the way they are created (too a great extent even mining is misunderstood by many in the mainstream media). All this is evidence that they are not really ready to be adopted by the average Joe. Currently they are theses exotic speculative magic, well, yes, what are they … who cares as long as they go up in price.
In fact, cryptocurrencies, whether they are called bitcoins, litecoins, dogecoins, monero, dash, or IOTA, are awesome. The concept of a decentralized monetary system that is global and allows to transfer money within seconds rather than days or weeks is nothing short of revolutionary and will increase productivity and boost economies around the world. As wonderful as they sound in theory, there is still a way to go before the wheat is separated from the chaff. Some of are simply too funny to be true. I always smile when I hear of currencies that will become the new monetary system for dope heads such as potcoin, or sound like an amusement park (ever heard of Decentraland?). Or how about Groestlcoin? Sounds like an Austrian dish, although their ideology is appealing.
Regardless, some currencies are here to stay including the Mack Daddies bitcoin, litecoin, and dogecoin. Their value to individuals and world economies is more than intriguing.
Power of cryptocurrencies
Cryptocurrencies are powerful in so many ways. From their transaction speeds to their independence. Everyone has been there, annoyed by the day-long delays until a bank transfer reaches the other party. If you have ever send bitcoins or other cryptocurrencies to a wallet, you are familiar with the amazing speed by which they are transferred between wallets.
Another major advantage is for those who are globally active. Whether you are an avid traveler, an exporter, providing your services across the planet, want to buy your train ticket in another country and different currency, you know of the drawbacks in terms of, not only speed, but costs. The exchange rates are not necessarily the issue as they can work in your favor when being paid in a currency different from the one you usually deal in. The primary drawback of working and dealing in different currencies are the ridiculous fees that you have to pay for simple services such as transferring money across borders or withdrawing at an ATM in a country that uses a different currency. With global currencies such as bitcoin or litecoin, dogecoin or monero, this no longer presents an issue. There are no exchange fees, as the currency you are paying your train ticket or dinner in is the same as the one you are using back home.
Cryptocurrencies are fast and cheap making them a fantastic means of payment for any traveler or international business.
Value of cryptocurrencies
Another major advantage is the value storage abilities free from any government or central bank influence, an alternative to fiat currencies, and the fact that they are no longer stored with one provider, usually a bank, but are only existent in the virtual world. With millions of computers acting as “banks” verifying transactions, no single player can decide how long it takes to transfer your money, whether you can access your account, or how much money you can hold in your account. With cryptocurrencies the dependency on one party is abolished.
Cryptocurrencies are also free of any interference from organizations. Whether it is a currency reform or hyperinflation with central banks printing money, the risk of fiat currencies is that the average person has absolutely no control over how much the notes and coins in their pockets are worth. Surely, there is little control over the larger scale of things. No single person can influence whether a currency survives or not, but the ability to quickly move between currencies is a massive plus allowing to counter any such danger to the value of your cryptocurrency. Additionally, as the entire community has to agree on the future of a coin, the possibility of an unpleasant surprise is almost zero. Every member of the community will know of pressing threats to the future of the currency and can thus respond accordingly.
On the banking side: While cryptocurrencies are certainly not 100% safe, as there is, as has been too frequent in the past, always the possibility of hacks during which wallets are robbed of their entire content and cryptocurrency owners end up with little left, the same risk lies with traditional banks. Remember Iceland when English Prime Minister Gordon Brown froze any Icelandic money using anti-terrorism laws leaving thousands of savers fighting for their hard earned money? There was little savers could do to retrieve their money; most had to wait for years before they were compensated by governments for their losses requiring lots of paperwork to prove that it was actually your savings that were caught up in that political drama.
Cryptocurrencies are powerful and extremely valuable. While I doubt that government regulated currencies will disappear, having a parallel independent system is surely a great addition and alternative to the world of finances allowing much freedom to the individual holder of bitcoins, litecoins, dogecoins, moneros, and their friends.