As of 2021, it's estimated that global crypto ownership rates are hovering at around 3.9 percent. This translates to about 300 million users across the global community.
It's no secret that cryptocurrency is steadily gaining traction. Over the past five years, average bitcoin prices have increased by over 1,330 percent, and the overall crypto market has a projected value of $1,902.5 million by 2028.
We've finally reached a point where the cryptocurrency market is more than just a niche interest.
Currently, over 18,000 businesses already accept crypto as a form of payment, and more people than ever before are looking at cryptocurrency as a viable alternative to traditional banking.
We still have a long way to go, but I believe that cryptocurrency can completely revolutionize how we handle monetary transactions all over the world.
4 Ways Crypto is Poised to Change Our Lives
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Mining Made Easy
Cryptocurrency mining (which is sometimes called "farming") is in fact a transactions processing activity. Mining is also how the blockchain ledger is maintained, which makes it a critical part of any cryptocurrency's success. The additional coins that are “mined” are in essence compensation for services rendered.
The mining process generally requires advanced computing power, as validation of transactions requires solving complex cryptographic hash puzzles. This translates to a lot of time and money sunk into the endeavor, which acts as a relatively high barrier to entry. Mining is considered a "side gig" that only middle-class demographics participate in for the most part.
However, as crypto gains in popularity and computing power becomes more accessible, the mining process can become more widely available. It will also be a more viable option for making money, which will strengthen and further legitimize cryptocurrency transactions.
- Faster Payment Processing
You've probably noticed that transactions typically take a few days to show up in your banking statements (or they're marked as "pending"). This is because it takes a while for banks to communicate with each other.
For example, SWIFT, which is widely used across the globe, takes 1-7 days to process the transaction. There are more localized solutions like SEPA, which is available only for the eurozone bank accounts and only supports EUR transfers. These solutions are usually pretty prompt, as SEPA transaction only takes up to 10 seconds.
The new universal global solution could be conducting processing with digital currency. It may take up to 4 hours, which is slower than some localized systems, yet a lot faster than traditional banking instruments.
This is the kind of change that will completely shift the paradigm of how we conduct business. When this "communication between banks" is entirely based on a decentralized digital blockchain, the time for verification procedures necessary for a secure transaction will be almost imperceptible. And, as the technology is constantly developing, they could only take a few seconds sometime soon.
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Cryptosavings
Crypto savings accounts are a new trend that has the potential to completely transform the way we handle savings. There are several companies, such as Revolut and Blackcatcard, that offer crypto wallets and crypto services in addition to traditional banking services, so it makes sense to utilize the opportunity to make extra money via crypto savings.
The APYs of cryptocurrency savings accounts are generally much higher than traditional savings accounts, thanks to the economics of supply and demand. Most companies that handle digital currency savings accounts do so by offering to lend a person's stable coins (which are always in short supply relative to demand) for a set period of time.
During this time, the lender accrues considerable interest as a cut of the proceeds from the lending activity. This makes it fast and easy for coin holders to passively earn with their crypto in a low-risk setting.
There are also services on the market like Gekkoin that take on all of the investment risk associated with crypto. In essence, the company guarantees that a user will not lose their money if the price of the currency abruptly plummets. However, the catch is that if the price of the coin shoots up, users only get a capped percentage of the return. This is another way to build reliable savings with digital currency.
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Upgrading From E-commerce to Crypto-Commerce
One of the significant problems with the amount of time it takes for traditional banking procedures to process is the volatility of the currency. For example, if you make a purchase in USD and it needs to be converted to euros or pounds sterling, the amount you're actually charged may vary depending on the current exchange rate.
While this isn't as problematic for less volatile denominations, it's still troublesome and inefficient. Instead, two problems would be solved if banks used cryptocurrency by default. First, the transaction would happen instantly, with no waiting on communication. Second, you always know exactly how much you're being charged without worrying about exchange rate fluctuations because the waiting period is eliminated.
A number of companies have begun to accept crypto as payment. Tesla is the most notable, but retailers like Gucci and lending companies are following suit.
Cash, Card, or Crypto? The Way Forward is Clear
Cryptocurrency may have started out as a pipedream and a niche interest. Still, it has grown into a viable entity that is poised to replace traditional currency in the coming years. The market is expanding rapidly, and its capabilities are growing by leaps and bounds.
From mining as a profitable job to earning substantial interest via crypto savings, the digital currency market will soon overtake traditional banking and revolutionize how we interact with money.