Cryptocurrencies are already a mainstream thing, which means that you probably know quite a bit about them and are capable of numbering a few of them. However, what you may not understand is just how important this digital asset is for the world of finance and its future. So, in order to clarify this, here are some aspects of the financial world that crypto could change forever (for better or worse).
1. New investment opportunity
People have been investing in Bitcoin ever since it was first launched in 2008. Still, BTC then and now are not one and the same thing.
Back then, some people believed in this new technology, but there were also people who used it for the sake of anonymity. You see, at the time, cryptocurrency was mostly unregulated. It was an asset that no one tracked, and no one asked any questions about. It was used for some dubious purposes at the time.
Still, all of this changed with its sudden rise in value and popularity in 2017. At that point, the explosion in value made a lot of people interested in how they could capitalize on BTC, and this made them curious.
Out of curiosity, they started reading more about topics like cryptocurrency, blockchain, and DeFi. With that, the cat was out of the bag, and there was no more stopping progress. People realized that this was nothing shady (in its nature), saw first-hand that it actually works, and (most importantly) recognized this as a way to make money.
Now, while one may argue whether BTC will ever reach that psychological barrier of $100k, it is arguable that there are many new cryptocurrencies that are undergoing considerable growth. The fact that they’re still relatively obscure means that you can potentially invest a small fraction of your portfolio into buying them (just enough to satisfy your risk-to-reward ratio) and see amazing gains.
This Technopedia list includes some of the coins that have the biggest promise of making it in 2024. Here, experts assess their cost, potential, and usefulness and break them down into the essentials.
2. Money transfers
Transferring money is simpler than ever. Not only that, but the bulk of these money transfers no longer require so many checks and verifications. In order to register a crypto wallet, you don’t even have to provide your real name.
While this may sound like a liability, when you take a look at this from the perspective of international remittances, you need to keep in mind that so many areas of the world are underbanked or unbanked. This means that residents living there wouldn’t be able to receive funds any other way. This is why we can expect cryptocurrencies to be far more important when it comes to the field of financial remittances.
Even regular financial transfers are a lot simpler to handle this way. They’re faster, require smaller fees, and are, overall, handier. For the reasons we’ve described so far, these transfers are available to anyone who has access to a smartphone.
Now, to get one thing out of the way immediately. The fact that it doesn’t require as many checks and balances isn’t because they’re reckless but because they have the technology in the form of blockchain doing it simpler and cheaper.
There’s also a downside to these transfers. There are no chargebacks. Once the transfer is complete, it’s done, and it’s nearly impossible to get it back if you make a mistake. So, you need to be a bit more careful when conducting these transfers.
3. A greater push for technological development
When it comes to the motivation behind tech development, two things need to be considered. First, you need to have a need for a certain tech. Second, you need to have a financial incentive.
Now, while there was always a need for things like blockchain, there was always a lack of funding. It’s, therefore, no surprise that the massive breakthrough happened right after everyone started buying crypto. This was a major “crowdfunding” experience where teams working on the society-changing technology finally got the resources they needed.
This is not all that these cryptocurrencies are capable of.
You see, some cryptos are closely tied to the development of various AI-related technologies. In some scenarios, you have AI coins that gatekeep certain features of AI platforms, thus acting as on-platform currency. This helps the internal economy of the platform and provides the development team with the resources they need to bring some of their ideas to the conclusion.
One of the biggest concerns regarding the crypto industry is the power it takes to maintain these DeFi systems. The joint computing power of all devices on the network can be quite high, which caused a lot of controversy. Well, it was not really controversial; it was more like it gave ammunition to the arguments of anti-crypto people.
Fortunately, there’s a massive push for green coins, which either invest a part of their token profit in finding greener solutions or actively try to host as much of their computing power on green energy as possible.
4. Giving people more control over their assets
The first thing worth considering when it comes to control is that no intermediaries are involved in the transactions. This makes lower fees possible.
After all, while some fees are necessary to keep the system running, the “system” is a term used very loosely. After all, there’s no physical infrastructure (rent for massive bank branches) whose maintenance costs are passed down to the consumer. In other words, you pay for the services you actually use. So, similar to mBanking, you can control all your assets via an app. Unlike mBanking, as we’ve already mentioned, you’re not financially supporting systems you don’t use.
If you download an exchange app, you can buy as much as you want and whenever you want. All you need is a crypto wallet to which you can connect, but you don’t have to submit a ton of paperwork and wait for an institution to approve of you. You have full freedom, and this is why cryptocurrencies have a serious potential to democratize the world of finance fully.
Needless to say, this can change quite a bit in the lives of investors, traders, and professionals. More and more people have considerable assets in crypto. They are paid in crypto (more common than you think) and buy crypto as an investment, while some work as full-time crypto traders. This means that, via an app, they can quickly convert their assets to cash and turn them into another form of assets.
For instance, they could become cash home buyers, thus joining the world of real estate owners.
Cryptocurrencies are more than just a new asset; they’re the future of finance
This statement rings true because the existence and power of crypto are also changing conventional finance. Just think about the way things worked a decade ago. The rise of mBanking is just one way for traditional financial institutions (like banks) to try and catch up with the convenience of the crypto market. Who knows what the future of the finance brings but one thing is sure – it’s hard to imagine it without crypto.
