Over the past couple of years, cryptocurrency has experienced an explosion in popularity throughout the internet and business world. Most investors unfamiliar with the crypto market wonder why cryptocurrencies garner attention and even have websites dedicated to monitoring the Bitcoin price on Binance.
The most common questions skeptics ask are: “Why would anyone want to use cryptocurrencies; standard and local currencies already work for most things?” And “Why would someone invest in something as volatile and unregulated as cryptocurrency?”
To the surprise of many skeptics and believers in the crypto market, there are a plethora of advantages to using and investing in cryptocurrencies. This article will showcase the top five benefits of using Bitcoin, Ethereum, and other viable cryptocurrencies.
1. Faster Transactions
For example, you need to send money to a person in the United States. There are only a few ways to transfer funds or assets from one account to another quicker than you can with cryptocurrencies.
The bulk of transactions at U.S. financial institutions typically settle in about three to five business days. It takes at least 24 hours for a wire transfer to process, and stock trades usually take about three days to settle.
One of the distinct advantages cryptocurrency transactions have is that these transactions can be completed within a matter of minutes. The moment the network confirms the block with a transaction in it, it settles entirely, and the money is immediately available for use.
2. Lower Cost
Transactions done with cryptocurrency are relatively cheaper when you compare them with other financial services. On average, wire transfer fees can cost from nothing up to fifty dollars. The average cost of domestic outgoing wire transfer fees can range from zero to thirty-five dollars. Wire transferring overseas is even more expensive, with an average cost of thirty-five to fifty dollars in international wire transfer fees.
As mentioned, cryptocurrency transactions are typically less expensive than standard wire transfers both domestically and internationally. However, it is critical to keep track of the demand on the blockchain as it can cause an increase in transaction costs.
3. Ease of Use
Almost anyone can use cryptocurrency since all you need is a smartphone or computer and a stable internet connection to access and use them. If you compare it to opening a new account at a traditional financial institution, setting up a wallet for cryptocurrency is much faster.
Unlike typical financial institutions, setting up a cryptocurrency wallet does not require ID verification, background checks, or credit checks. Many individuals have their own reasons for not being able to or not wanting to use traditional banking services for online transactions. Essentially, cryptocurrencies enable those without a bank account to gain access to financial services without the need to go through any centralized authority.
4. Tightened Security
Unless another person somehow gains access to your crypto wallet’s private key, there is no possible way for them to gain access to your funds. Additionally, if you misplace your private key, it is impossible for you to recover your funds.
Security also doubles down on transactions because of the blockchain system as well as the distributed network of computers that verify these transactions. With more computing power added to the network, the system becomes more secure.
Theoretically, if someone attempted to attack the network or modify the blockchain, it would require a ridiculous amount of computing power. That is because cybercriminals would need enough computing power to confirm a multitude of blocks before the rest of the network could verify the accuracy of the ledger.
For instance, if a cybercriminal targets popular blockchains like Ethereum or Bitcoin, it would be unreasonably expensive to plan and execute an attack. The only cases in which cryptocurrency accounts get hacked are usually due to poor security in the centralized exchange. Keeping your crypto assets in your wallet is a far safer way to secure your cryptocurrencies.
5. Better Privacy
In the information age today, where questionable privacy policies and cybercriminals run amok, maintaining one’s privacy is critical. This fact is especially apparent when protecting your financial and personal records.
As mentioned, you do not need to register for an account at any financial institution for transactions concerning cryptocurrency. That means it is much easier to maintain a certain level of privacy.
While you have an identifier on the blockchain known as your wallet address during transactions, it does not include confidential or private information about you. That significantly reduces the chances of someone’s dealings or personal information being leaked.
Switch to Cryptocurrencies
While the systems set up by financial institutions today are functional, they are far from perfect. As mentioned, switching to cryptocurrencies provides users with better privacy, quicker transactions, nearly impenetrable security, lower additional expenses, and accessibility.
That does not necessarily mean you should close all your traditional bank accounts. It only means you should consider investing in cryptocurrency. As the years go by, cryptocurrency is becoming more and more viable for trading. Soon it may become the universal currency of the future.