How Cryptocurrencies Can Help Global Economy and Build a Better Future?

There is already an entire industry built around cryptocurrencies and it’s held by institutions dedicated to supervising all the digital coin exchanges taking place throughout the world. The rate at which the cryptocurrency industry is growing is earth-shattering and this can be confirmed by early adopters that became rich overnight and found opportunities to grow financially. Bitcoin, the most famous of these cryptocurrencies, has already permitted many people and companies to develop and flourish, while many also rely on trading as their source of income. The economy is slowly shifting to adapt to these needs and cryptocurrencies have a great potential in satisfying them.

More than a third of the world population does not have access to basic banking services that can help them out in case of a personal financial crisis – loans, checking accounts and the list can go on. These people that in most cases are already financially disadvantaged typically resort to doubtful and dangerous lending practices. The interest rate of these practices is mostly unfair, which consequently leads to more instability among the people who requested the loan. This is where cryptocurrencies come in with their high volatility and ease of use.

Moreover, cryptocurrencies like Bitcoin could help individuals and businesses to facilitate small-scale international trade. Using Bitcoins enables these parties to sell products in exchange for Bitcoin and thereby avoiding traditional e-commerce systems, which often involve having to set up a merchant account with a formal bank.

Without cryptocurrencies, the local fiat currency must often be exchanged to more widespread fiat currencies like the US dollar or the Euro and then must be converted again into the target currency, since there is often no liquid market for the exchange of the fiat currency to the target fiat currency. This process could be optimized through cryptocurrencies, which could make it faster and cheaper.

There are now many apps and programs that facilitate the use of cryptocurrencies and bring them closer to a wider audience. An added benefit of cryptocurrency use is that it’s completely decentralized, so trading can be done freely across borders. The use of technology will facilitate a financial revolution that will leave everyone more financially connected, empowered, and enabled.

Because cryptocurrencies and blockchain don’t need an actual brick-and-mortar building to exist, the costs associated with their transactions are minimal. There is no need for employee wages, utility bills, or rent to be paid, so these savings naturally morph into low transaction fees. This in turn encourages more and more people to trust these new financial tools and start transactions, allowing for the global economy to be more closely intertwined.

The decrease in transaction costs could also increase the possibility for microcredits because currently, money transactions face high costs. The elimination of these costs would open immense possibilities for international financing. Using cryptocurrencies enables individuals in more developed countries to make small money transfers to people in developing countries. This transaction might be for a small amount of money but could be life-changing for an individual in a developing country.

Such microfinance transactions are currently expensive because the borrowing and the repaying transactions charges are almost as high as the payment itself. However, when transaction costs are massively reduced or are even eliminated, such loans could become more widespread.

Since all blockchain and cryptocurrency transactions are automated and digitized, they are all tracked in a distributed ledger. The best part about it is it strengthens social trust and cannot be manipulated by either people or companies, which greatly diminishes the risk of fraud and corruption. This means that underdeveloped countries also have a greater chance of entering the financial transactions game and boost their own economic and social prospects. Citizens can use the publicly available record data of the cryptocurrencies in the blockchain to monitor the way in which the state funds are used. It would also allow governments to track their spending better and improve their budget allocation.

There’s never been a more prosperous time to do business than it is now, in the sense that blockchain technology and cryptocurrencies can help entrepreneurs receive payments in more currencies. Cryptocurrencies help to create access to the world market for businesses particularly when they want to expand. Their customers can then pay companies from other countries in cryptocurrencies even if the firms do not have a bank account with an international identification. For example, a website developer in a developing country can get hired by customers outside of his country and can get paid in cryptocurrencies such as Bitcoin.

Next, Cryptocurrency has disrupted the way early-stage companies raise capital. With initial coin offerings, startups around the world can raise money quickly and cheaply from a wide pool of global investors. The valuation of a company is almost immediately reflected by the market, a process that has traditionally been challenging for early-stage businesses. Shares are issued as tokens and tradable almost immediately, bringing large amounts of liquidity to the company.

For entrepreneurs, cryptocurrency may be the investment opportunity of a lifetime. Never before in history have retail investors had investment access to high-growth early-stage companies. Traditionally, venture capital funds and private angel investors have held monopolies on access to investment in the world’s best technical talent. Cryptocurrency provides a gateway for anyone in the world to invest in the world’s most exciting technology, allowing retail investors to own a basket of high-growth companies.

The world is changing and it’s changing quickly. The speed at which cryptocurrencies are taking over is a clear indicator that traditional financial institutions can no longer hold the fort so well and that other financial needs are arising and need to be addressed. Similarly, the world is facing a growing need to tear down borders, in search of complete social and financial inclusion – this blockchain technology has everything it needs to address such issues.

It will only be a matter of time until these cryptocurrencies definitively find a way into our lives, shaping them for the better, with economic growth and inclusion in mind. Millions of people will now have the opportunity to invest, send money across borders, save money and start a business thanks to the amazing possibilities that cryptocurrencies bring to the table.