Cryptocurrency

Published on January 21st, 2022 | by Bibhuranjan

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Benefits of transacting with Cryptocurrency

Cryptocurrency was created to replace general currencies. When it was launched, Bitcoin was envisaged as a medium of daily exchange by Satoshi Nakatomo; its inventor. A decade later, we’re starting to see the digital asset and some others like it live up to that promise. So, what edge does making transactions in cryptocurrency have over the regular currencies?

Decentralization

Cryptocurrencies are digital assets marked by cryptography; a network distributed over an oversized number of computers. It works on blockchain technology, which allows them to exist monopoly free, and out of the control of the government or any organization. Also, as is the case with fiat currencies, cryptocurrencies are not disbursed through intermediary institutions like banks. Payments and transactions involving cryptocurrencies are processed through a private network of computers using a shared ledger. The Bitcoin payment system is purely peer-to-peer, meaning transactions can be carried out around the world, without approval from a third party or authority.

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No banking fees

Transaction fees can take a huge chunk out of your assets, especially if you transact a lot. As opposed to the countless fees charged by banks; ranging from maintenance, deposit and withdrawal to transfer, cryptocurrency transactions demand for none of these. International payments also incur lower fees compared to the exchange costs and fees involved with wire transfers and foreign purchases. Cryptocurrency transactions have no intermediary institution or government involvement, hence the costs of international transfers and payments are much lower than that of bank transfers. Also, the process is fast, eliminating the typical inconvenience of wait periods.

Autonomy

Fiat currencies are subject to various restrictions and risks, owing to their being controlled by institutions and the government, and account owners are never really in charge of their money. Cryptocurrency gives its account owners absolute power over their funds. That is, you have the final and only say over your assets. Crypto token prices are not determined or affected by any institution’s runs, restrictions or crashes, nor linked to any government policies. This gives complete control to crypto users.

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Confidentiality

Most transactions involving fiat currencies require an array of information to carry out the process. Banks transfers will only be executed when the identity of both parties have been verified by the bank, thereby placing the intermediary institution firmly in charge of the transaction, allowing them to control the provisioning of services to select parties. Although not completely anonymous, identifying transactions only by a blockchain address, transacting in cryptocurrency requires little to no information to conduct transactions.

Security

Cryptocurrencies are digital (nonphysical) assets, which makes thieving hard. If a person’s wallet keys were to leak to a thief, stealing of assets would be relatively easy, but the chances of that are pretty low. With proper security, it is nearly impossible to steal cryptocurrency, as the technology is built on such a safe and secure network. The blockchain ledger relies on different mathematical puzzles that are difficult to decode, and it makes transactions safer than ordinary electronic transactions. The strong encryption techniques employed throughout the blockchain safeguard against fraud and account tampering. Also, cryptocurrencies use pseudonyms that are unconnected to any user data or profile that may be traced.

The advantages of carrying out transactions with cryptocurrency go on and on, such as hedging against inflation, irreversibility, and adaptability of tokens and coins.

Cryptocurrencies are bound to replace general currencies, as projected, and the world’s projection towards a cashless policy all point to the fact that cryptocurrency is the currency of the future. El Salvador made Bitcoin legal tender in 2021, making it an officially accepted means of exchange for goods and services, Tesla accepts Doge as payment for merchandise; Wikipedia, Microsoft, Burger King, KFC and scores of other businesses also accept crypto as payment. There’s only one conclusion to this: The future is now, and the currency is crypto.


Cover Photo by Kanchanara on Unsplash

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About the Author

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Editorial Officer, technofaq.org I'm an avid tech enthusiast at heart. I like to mug up on new and exciting developments on science and tech and have a deep love for PC gaming. Other hobbies include writing blog posts, music and DIY projects.



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