Home Finance 5 Reasons why Cryptocurrency is the future of Money

5 Reasons why Cryptocurrency is the future of Money

by SML Kumar

Investments in cryptocurrencies and blockchain projects are increasing day-by-day.

In the Swiss Krypto Valley, 800 companies with 4000 employees are working on the digitization of assets.

In this digital age, cryptocurrencies are the next logical development stage of money.

Here are some of the reasons cryptocurrency will become the number one financial instrument for transactions in the future.

Investment in Crypto is growing continuously

There are now more people and businesses that send and receive funds in bitcoin.

The volume of transactions and the number of apps are growing exponentially.

The market capitalization for cryptocurrencies has doubled in the last one year and the volume has quintupled from USD20 billion to USD100 billion.

Also, the number of cryptocurrency wallets has quintupled in the last three years from 9 million in the third quarter of 2016 to 42 million in the third quarter of 2019.

While the number of crypto-currency transactions grew rapidly in the early years, growth last year.

But today, we can observe over 300,000 ETH transactions and more than 600,000 BTC every day.

The crypto market is regulated and maturing

Just early this year, The Wall Street Journal published their survey which showed that One in ten central banks surveyed wants to offer digital currencies that would cover about 20% of the world’s population within the next three years.

The Bank of Japan, The Bank of Canada, The Swiss National Bank, The Bank of England, the European Central Bank, Sveriges Riksbank, and the  together with the Bank for International Settlements (BIS), have recently formed a group -Sharing Experience of Digital Central Bank Currencies

The tools for investors are also becoming more professional. For example, with “Weiss Crypto Ratings” there is now an established and professional rating agency for cryptocurrencies.

All in all, it can be said that crypto-currencies are being accepted more and more frequently and that clearly shows that rules are gradually emerging.

People trust the Disruptive blockchain technology

The technology underlying most cryptocurrencies is based on the blockchain.

The blockchain technology stores data blocks in a chained row, distributed over the Internet on different computers and strongly encrypted using cryptographic methods.

It is important to know that, within the framework of the decentralization and encryption of the blockchain, cryptocurrencies play an integral and inseparable role.

While the trust people have in banks has declined in recent decades, trust in new technologies has increased.

Blockchain technology has now managed to gain the trust of several million people around the world.

People who have entrusted this tech with a total of more than $300 billion.

There are now many hundreds of applications in the most diverse branches of industry.

The energy industry, for example, is experimenting with Smart Contracts to enable a more direct exchange between decentralized energy producers and consumers.

The automotive industry is researching wallets for its cars so that gasoline and parking tickets can be paid for automatically.

And in the financial industry, for example, automatic dividend payments depending on certain financial ratios are well conceivable.

Creation of new business models

Let’s take the following brands for example.

Jaguar Land Rover, for example, wants to reward those drivers who exchange their data with IOTA cryptocurrency tokens.

The data that Jaguar Land Rover pays for includes information about traffic congestion or potholes.

There will also be a reward when drivers make their vehicles available for car-sharing services.

The IOTA tokens earned could then be used to pay fines, parking tickets, or to recharge batteries in electric cars.

Another good example is steemit. As a content creator on STEEMIT, you will receive “STEEM” from your readers.

STEEM is a cryptocurrency. Currently, a STEEM is worth about 0.17 US dollars and can be exchanged on several crypto exchanges.

It is not uncommon for an author to receive more than 100 US dollars for a contribution shared on steemit.

It’s still a platform for beginner online marketers to make money from but would become a global social media platform in the future.

It would be a platform that will challenge the top social networks.

And in the financial industry, blockchain can be used to significantly optimize many paper-based settlement processes, especially in international and cross-border banking transactions.

An example is trade finance. In principle, one can expect cost savings of over 30 percent.

Furthermore, new banking markets, products, and services are emerging, such as the crypto-currency investment products of the Frankfurt – ICONIC HOLDING or the combined crypto-currency bank account of a Berlin start-up.

It’s a multi-currency system

The US dollar has dominated for years now and the global financial system is already shifting from a US dollar-centric to a multi-currency system.

For example, Russia has been working for some time now to ‘de-dollarize’ parts of its financial system.

Since 2013 the Russian central bank has reduced the dollar share of its foreign exchange reserves from over 40% to 24%.

Against the backdrop of a recent summit, leaders from Iran, Malaysia, Turkey, and Qatar proposed using crypto-currencies, local currencies, gold, and barter for trade.

Great Britain, France, and Germany, supported by the EU Commission, have created INSTEX.

INSTEX is essentially an exchange mechanism that allows companies to trade without having to resort to the dollar or SWIFT.

China, India, and others are considering a jointly operated SWIFT alternative.

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