Why digital currency deserves a better reputation
Since its inception and throughout its tumultuous journey towards mainstream adoption, the cryptocurrency has ignited both enthusiasm and trepidation in equal measure. After the unfair beating it has received for years, it is time to protect digital currencies.
Unfortunately for crypto, first impressions are numerous. Bitcoin (BTC) originally gained a lewd reputation in its early years as the currency of choice for illicit activities – favored by dark web users, ransomware hackers, traffickers selling drugs and laundering money around the world.
However, the world has changed since the first Bitcoin was mined in January 2009. There are now more than 18 million of them in circulation and over 90,000 people have stored $1 million or more in Bitcoins, according to for crypto data tracking company Bitinfocharts.
In fact, there are signs that the cryptocurrency is finally gaining mass adoption. Just last year, El Salvador claim Bitcoin is a legal tender in September and October, the first Bitcoin futures (ETF) linked exchange-traded fund in the US started Trading on the New York Stock Exchange. Huge payment Visa also launched global crypto consulting practice in December, helping financial institutions drive their own crypto journey.
There is even talk of cryptocurrency becoming a medium of exchange in Afghanistangives a very real example of cryptocurrencies enabling financial transactions in a situation where the monetary system itself is being disrupted.
Related: How Are Afghans Using Cryptocurrency Under the Taliban Government?
Obstacles and barriers
Despite these success stories, persistent doubts persisted among the public and opposition was expressed by politicians, who feared a decentralized currency would put the public at risk. responsible for their own money. China declare cryptocurrency trading illegal in September, citing concerns about gambling and money laundering. Politicians around the world have expressed alarm at the potential to transform the established dynamics of the existing financial ecosystem.
The underlying factor behind all of this is fear, and recent research suggests it can be fear of the unknown. According to national survey commissioned of the money-making app Ziglu, almost a third (31%) of Britons surveyed are curious about investing in crypto, but 62% of them have refused to buy any products because they don’t understand market. However, as a sign that cryptocurrencies are gaining legitimacy in the public eye, the survey also shows that b
Bitcoin is now considered a smarter investment than real estate.
Now is the time to realize that despite its inherent risks, cryptocurrency is also an engine of good in the world. In an era where savings rates are plummeting, this relatively new asset class offers all of us the opportunity to invest in cryptocurrencies without the traditional barriers that exist in traditional finance, no matter what. whether we have more or less money.
Related: Stablecoin adoption and the future of financial inclusion
Some people don’t even have a safe place to keep their hard-earned cash. According to According to World Bank data, 1.7 billion people globally do not have a bank account. Many of us despise the ability to transfer money via credit cards and wire transfers – sending large sums of money to friends and family with a single tap on our smartphones – but for those who don’t, bank, this is not possible.
However, over 80% of the world’s population owns a smartphone, which is all they need to send crypto across international borders. Cryptocurrencies are driving financial inclusion by giving millions of people who don’t have access to platforms like PayPal or Venmo the ability to transfer money for as little as a cent. It is also a good alternative for those who are not satisfied with high bank fees because this new infrastructure, unlike traditional payment rails, is not constrained by profit dynamics.
Advantages of Cryptocurrencies
Smart contracts can replace services from banks, remittance companies or legal services, while cryptocurrencies and digital wallets can provide flexibility such as credit to customers and owners. financial rights without a centralized entity.
Cryptocurrencies can also protect citizens from economic turmoil. Venezuela is a prime example where many citizens are suffering from high inflation and the impact of US sanctions also affects their banks. They are increasingly converting their wages into cryptocurrency and using blockchain for remittances and payments.
For developing countries, Bitcoin is a great way for society to eliminate corruption because the community can track any Bitcoin transaction in the public ledger as people use the cryptocurrency to transfer money. .
Closer to home, cryptocurrencies are also democratizing finance. Has a low barrier to entry without a broker or a high net worth. Anyone can invest and create their own wealth. As a result, people are learning about concepts like annual percentages, lending and borrowing, and the history and purpose of money.
Disadvantages of Cryptocurrencies
However, any safeguards against crypto cannot avoid the elephant in the room: crime. It has long been associated with fraud and ransomware, but the truth is that blockchain is the perfect system to prevent such criminal activities.
Related: Bitcoin cannot be considered an untraceable ‘criminal currency’ anymore
Cryptocurrencies are not anonymous, they are just pseudonyms. The open ledger where cryptocurrencies live and move allows law enforcement to track and trace cash flows in real time, providing unprecedented visibility into financial flows. Criminals also need to convert crypto to fiat currency, providing an opportunity to not only blacklist wallet addresses, but also proactively catch criminals.
That’s why, as in the Colonial Pipeline ransomware attack in the US in June 2021, law enforcement was able to track and finally grasp ransom payment. That recovery is only possible because cryptocurrencies are the means of payment.
Related: Don’t Blame Cryptocurrency for Ransomware
The advantage of blockchain is tamper-proof. Through a process known as consensus, each transaction is independently verified by multiple parties. Entries are immutable, which means they cannot be modified and can only be updated by adding an appendix.
We are campaigning for a specialist unit in cybercrime law enforcement. Why is it necessary? Having dedicated human and technical resources that can proactively work with corporations that have been breached with crypto ransom demands. It can communicate and notify all crypto exchanges so that they can determine when and if criminals want to withdraw funds on the exchange.
Another properly raised issue about cryptocurrencies is the environmental impact: The massive amounts of electricity required to mine proof-of-work currencies like Bitcoin require warehouses filled with powerful computing equipment. strong continuous running.
However, this has changed. Currently, more than half of Bitcoin miners use sustainable energy. Bitcoin Mining Operations open northeast of Niagara Falls, home to the last operating coal plant in New York state, using cheap hydroelectric power to power the rigs. Meanwhile, President of El Salvador Nayib Bukele announced a Innovative plan to use geothermal energy from the Conchagua volcano to power its Bitcoin City project.
Cryptocurrency’s journey to mainstream acceptance is almost complete. Therefore, now is the time for us to overcome our unfounded fear and embrace the financial freedom, security and convenience it offers.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks and readers should do their own research when making decisions.
The views, thoughts and opinions expressed herein are the author’s own and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Ian Taylor is the chief executive officer of CryptoUK, an independent industry body that exists as a cohesive, trusted voice for the UK’s burgeoning crypto industry. With 20 years of investment banking experience, he has held a variety of senior roles in business, treasury and risk management, while remaining involved in a major global bank. . As chief executive of CryptoUK, he has built a community of over 100 participants and the industry’s most influential campaign for a fit-for-purpose regulatory framework in the UK, Europe Europe and more.
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