The global events of 2020 have been felt by people all over the world with major flux in financial markets and instability of infrastructures.
One surprising development during this time is the historic growth in cryptocurrencies with this decentralized encrypted currency reflecting changing times for government-issued fiat currencies.
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As a medium of exchange, cryptocurrencies are considered to be less susceptible to inflation which in the long term will help with stabilizing of its value as a currency. This is especially significant when we live in a time where world reserve currencies have a diminishing foothold and debt is ballooning.
In contrast, Eric Ervin writes for Forbes, “Cryptocurrencies offer an easier-to-use alternate form of payment for goods and services particularly when it comes to cross-border payments.”
So what are cryptocurrencies specifically and what makes them a viable alternative to fiat currencies?
Firstly, cryptocurrencies have a limited supply with one of the major types, bitcoin, designed to reach a maximum number of ‘coins’ in circulation which befits the colloquial shorthand of ‘digital gold’.
Secondly, cryptocurrencies are portable giving them greater utility which is even more groundbreaking when you understand the technology at play. Blockchain encryption technology is decentralized with this minimizing scope for counterfeiting, theft and fraud.
The technology itself is incredibly valuable which is why the United States alone is projected to exceed $4 billion in annual spending on blockchain solutions by 2022.
Thirdly and finally, cryptocurrencies aren’t limited by geography or bank accounts which empowers people all over the world and makes them a viable option for organizations such as UNICEF to deliver aid.
Overall, cryptocurrencies reflect a pivotal moment in human financial systems as well as social, cultural, and political change as a whole. To expand upon the development of cryptocurrencies, Paradyn has shared this infographic guide to ‘The History of Cryptocurrency:
A Timeline’. Covering 1982 to 2019, this 101 explainer has more statistics and key facts to continue the informational journey.