This blog article will provide an introduction to cryptocurrency. Crypto currency is seen as a revolutionary step allowing users of the internet to conduct money management without traditional middlemen such as banks, credit card companies and other financial institutions.

 

The threat of inflation

 

As of June 2018, Bitcoin has surpassed the US dollar and euro in terms of market capitalization. Reaching this milestone at a market price of $3500, Bitcoin’s price is up 500% since January 2017. There are multiple reasons for Bitcoin’s rise such as its decentralized trading model, low transaction costs and great anonymity levels. However these four features also “work” against it — more so the former two. Inflation threatens to destroy the value of individual’s currency by inflating the money supply, which creates a bubble then bursts. This means that individuals’ hard-earned money is losing it’s value, putting their future and investments at risk. In response to inflation, many people are investing in cryptocurrencies because they can easily track its stopping point and have low transaction fees Inflation is the gradual and increasing inflation of prices. In general, inflation gradually increases the cost of living so that it becomes unaffordable for ordinary people to live. This may lead to a devaluation of currency and other shortages in goods and services. The threat of inflation contributes to an investment bubble which can lead to efficient outcomes like shorter periods with very high interest rates.

 

Combatting inflation by using cryptocurrency

 

Cryptocurrency has seen a rapid expansion in the last few years as it has become mainstream. This form of digital currency is breaking into more and more industries as they begin to see the true potential of what cryptocurrency can offer. With low inflation rates and a seemingly infinite money supply, cryptocurrencies are the perfect solution for battling inflation. Cryptocurrency is quickly exploding in popularity and companies, such as Amazon and Microsoft, are donating millions. It’s estimated that 100% of online currency transactions will be carried out with Bitcoin by 2020. These currencies eliminate the need for an immobile money supply, enabling a direct correlation between wealth and the momentum of innovation.

 

Challenges of using cryptocurrency in day to day life

 

The idea that cryptocurrency can be used everyday has yet to gain widespread popularity. Though it provides great advantages- particularly in the instance of fighting inflation- some challenges remain when it comes to integrating technology into banking and altering global economics. Using large sums of cryptocurrency has received a negative reception from many people. People are reluctant to convert the money they have into the currency because it is anonymous and still fluctuates in price frequently. Effectively, if you use a lot of cryptocurrency every day for purchases or payment for services, it’s difficult to reconcile your expenses with the value of what you have deposited.

 

Conclusion

 

As a result of increased popularity of cryptocurrencies, the outflow of funds is becoming less profitable for governments and banks. This has happened because the holders of the cryptocurrency are able to bypass the central banking system and get their money in and out without having to go through any interference from governments or institutionals such as a bank.

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