Cryptocurrency is the newest addition in the digital payment sector and is used for several purposes right from making an investment to money transfer.
It is all due to its unique features and aspects that makes it a utilitarian asset.
The most important aspect of cryptocurrency is that it is paperless and involves very little or no hassles. It can be used just like any normal currency with the only significant difference of carrying only digital information.
Another significant aspect of it is its decentralized nature. It is not issued or controlled by any central agency or banks and governments cannot take it away.
Based on blockchain and cryptography, cryptocurrency is known for its security which also makes it so safe to use.
Why are Cryptocurrencies So Popular – 10 Best Reasons
There are several good reasons that make cryptocurrency so widely accepted and popular, especially amongst the investors. However, here are the ten best reasons.
Blockchain technology is hard to modify and does not get corrupted easily. This makes the cryptocurrencies fraud-proof. Moreover, the transactions are transparent and are stored in a public ledger.
However, the identities of owners of the coins are encrypted for safety reasons and this also ensures the legitimacy of keeping the records. Since this is decentralized, there is no scope for any identity theft.
The blockchain technology makes the ‘smart contracts’ impossible for fraud and virtually unhackable making cryptocurrencies so high in demand.
2. Ease of use
Perhaps the most significant reason for the popularity of cryptocurrency is its ease of use. Though based on blockchain technology, it can be used easily by anyone who is not tech-savvy.
All that a user needs is a smart device and a stable internet connection. Payments and settlements can be made instantly through traditional and reliable exchange systems.
Add to that, more and more websites, retailers, and other organizations are starting to accept cryptocurrency as payment, thereby making the use of it easier all the time.
The fees associated with using cryptocurrency are typically very low, and some specific exchanges do not even charge any fees for it either.
On the other hand, when you use any other online payment options, it is highly likely that you will need to pay high transaction fees.
This is another big reason why cryptocurrency is so popular around the world, making it a far better deal and a viable payment option.
The cryptocurrencies have the unique potential to remain stable even if the economy of a specific country faces a turmoil.
This makes this currency so popular and people have a lot of faith in it as well.
The main reason behind it is that this alternative money is not associated with world governments and therefore has very little or no scope of devaluation like other official government currencies making it more appealing and safer to invest on.
5. Profit potential
There is a huge potential for profit while investing in cryptocurrency which is another good reason for people getting involved and interested in it.
Bitcoins and other forms of cryptocurrencies can be bought easily when the price is low and sold easily through the exchange when prices rise.
The good news is that the market of cryptocurrency has not cooled in the past few years and has shown no signs of it either in the years to come. Therefore, investors can make huge profits from cryptocurrencies.
Ideally, according to economics, the supply of money is the key to the value of the currency and its maintenance. If the supply is very high, it can cause a spike in the prices of goods.
This will, in turn, lead to an economic collapse. On the other hand, if the supply of money is too little, it will also cause several economic problems.
Therefore, monetarism or the macroeconomic concept assures the health and growth, or its lack thereof, for any economy based on fiat currencies.
For cryptocurrencies, the issuance rate and supply of it are quite flexible and change over time to ensure a healthy return on investment or ROI.
Apart from the flexibility aspect of cryptocurrency, its divisibility into much smaller incremental units also makes it a more successful, popular, and reliable currency.
It can therefore be used as a trustworthy medium of exchange for smaller values and for all types of goods within the economy.
This divisible nature of cryptocurrency allows it to reflect the value of every good or service more accurately that are available all through the economy.
Utility is a must-have feature for any currency to be effective and useful. This will give the individuals the ability to trade with it most reliably for the purchase of goods and services.
As it was the case in olden days when precious metals were used for trading but was burdensome and unsafe to carry it from one location to another, cryptocurrencies easily meet this prerequisite.
Cryptocurrencies were created keeping this aspect of utility in mind in the first place, which makes it so popular.
Cryptocurrencies can be easily moved or transferred allowing the users to avoid having to barter for goods directly with the participants within the economy.
This transportability aspect makes the cryptocurrencies all the more useful. You can transfer it easily within the economy of your country as well as between other nations that accept it, via a reliable exchange.
Cryptocurrencies are much more durable in comparison to physical forms of fiat currencies, such as a dollar bill. This makes it more effective.
Though sturdy, a dollar bill can be torn, damaged, mutilated, or destroyed easily making it unusable. Cryptocurrency, being a wholly digital form of payment, is devoid of such susceptibility and physical harms making it more valuable.
Unless you lose your cryptographic key, it will not be lost either because it will always exist in the records in blockchain. Also, malicious parties cannot disrupt it by inundating it with fake bills and thereby reducing its value.
It is very difficult to counterfeit, thanks to the complex and decentralized blockchain ledger system which effectively creates a duplicate record.
Counterfeiting it will need an overwhelming amount of computing power and prowess, effort, and money, thereby making cryptocurrency more durable.
The world today is moving rapidly towards a digital ecosystem and the global economy is now relying heavily on digital assets such as cryptocurrency. A whole lot of good reasons are there for it to be so popular and widely accepted.