You don’t have to look for very long to find news headlines discussing the fluctuating values of cryptocurrencies. Those are indeed fascinating, but they only show one aspect of the cryptocurrency market.
Gaining a thorough understanding of what’s going on in the cryptocurrency market requires looking at how these digital forms of payment are disrupting the global economy and what that could mean for the future.
Governments Are Eyeing State-Sponsored Cryptocurrencies
The U.S. dollar has been the world’s dominant currency since World War II. When the United States experiences economic upheaval, so do many other parts of the world that aren’t geographically nearby. However, some governments are considering getting into the cryptocurrency market, which could make the United States have less influence than it does now.
Leaders in Venezuela and Russia are among those weighing the pros and cons of government-backed cryptocurrencies. Russian officials hope to meet with representatives from nations including China and India to investigate the possibility of a joint cryptocurrency associated with the participating countries.
The transparency associated with blockchain, the transaction-recording system linked to cryptocurrencies, is appealing to nations that want to minimize tax evasion. Furthermore, if a country doesn’t believe the worldwide financial system is directly beneficial, it might start a cryptocurrency to enjoy more autonomy.
It’s Easier Than Ever to Buy Things with Cryptocurrencies
Not long ago, the options for spending cryptocurrencies in brick-and-mortar outlets were limited. That’s all changing as some merchants are accepting cryptocurrency at cash registers due to service providers that offer point-of-service software or terminals.
Similarly, an increasing number of providers of cryptocurrency debit cards are popping up in the marketplace. People can use them at any store that accepts regular debit cards. Since borders do not define cryptocurrency expenditures, imagine the possibilities of frequent travelers purchasing things with it instead of having to visit currency exchanges after landing in foreign destinations.
Paying for medical treatments with cryptocurrency isn’t out of the question, either. Physicians in places including California, Poland, New York and Lithuania let their patients use Bitcoins instead of fiat currency.
Reduced Dependency on Banks and Money Transfers
Cryptocurrencies are already disrupting how people send money to each other, specifically because they don’t need to have bank accounts and can bypass the fees typically charged by money transfer services. Currently, non-cryptocurrency transfers happen with the help of the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
SWIFT doesn’t transfer money. It only facilitates a channel of communications between banking institutions. And, the SWIFT technology isn’t efficient, which sometimes results in transfers that take days to complete. In contrast, cryptocurrency transfers between people in two different countries can occur in seconds with some providers.
Also, statistics say there are two billion people worldwide who don’t have bank accounts, collectively representing a segment of society that’s often referred to as the “unbanked.” In many of those cases, the respective individuals would like to have bank accounts but get rejected for reasons including not making enough income.
Being a cryptocurrency owner allows a person to hold funds without having a traditional bank account. Therefore, cryptocurrency has had a positive effect on the world’s economy by breaking down banking barriers.
Cryptocurrency as a Job Creator
Due to a growing amount of interest in cryptocurrencies, the companies associated with it have scrambled to build workforces of people with cryptocurrency and blockchain experience, or those who express a desire to learn quickly and have a passion for the industry.
Let’s look at the case of Upwork, a website that connects freelancers with individuals and companies that are ready to hire them. A little over a year ago, the site only had 96 cryptocurrency-related job posts. Then, in the fourth quarter of 2017, that number ballooned to 2,200, indicating the rapid rise in demand. Many of those income-generating options pay hundreds of dollars per hour, enticing people to make career changes or expand their skills.
People have also found moneymaking possibilities by working as cryptocurrency miners. They earn by solving equations that verify the validity of blockchain transactions. One man from Kenya who works as a miner makes about $800 per month and says cryptocurrencies have opened up the world of finance to him, which would have otherwise been impossible due to his lack of formal education.
The World with Cryptocurrency
These examples only scratch the surface of how cryptocurrencies impact the worldwide economy. As they continue to be prominent in the marketplace, more of the same seems likely to continue.
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