Many people still do not understand the main advantages of crypto currency before Fiat money. Like how greedy can be banks, charging a huge fee for anything at all. Let’s try to understand why cryptocurrency is more profitable for cross-border payments and for domestic use in everyday life.
The following text is a translation of the article Elijah Bradley on Cointelegraph.
I already have a credit card. Why would I want to pay with cryptocurrency?
Perhaps it sounds a bit harsh, but banks and traditional payment systems limit your freedom.
Imagine that you live in the USA, and your beloved dad, whose birthday coincides with independence Day, lives in another country. Because all local banks will be closed, you can experience a significant delay when sending money to foreign Bank account of your dad. To them he will buy a new garden tractor as a gift.
To avoid this, you have to use the PayPal app or the traditional money transfer services by Western Union. However, there is no guarantee that the money will reach in time or will be in the pocket of your ancestor, as all people make mistakes. For example, two foreigners in the United States once were the heroes of this Thriller with frozen Bank accounts and the suspicion of fraud, after one of them sent $ 100 to another instead of her daughter.
Finally, financial intermediaries not too worried about the birthday of your father. You are required to pay Commission depending on the transferred amount and the beneficiary’s country, even if you can’t afford it.
Okay, but what is cryptocurrency any different?
The basic idea of cryptocurrency is a peer to peer (p2p) payments at any time and without intermediaries. That is, decentralized networks in which all members are equal.
Let’s start with the example of jameson Loppa. He is a leading engineer blockchain firm BitGo, which focuses on working with multipolicy and security. One day he talked about a typical holiday in the United States – presidents ‘ day, celebrated on the third Monday of February. 19 Feb 2018 local banks are normally closed and do not offer services to individuals. Meanwhile Bitcoin, being peer-to-peer payment system can process transactions in more than a billion dollars and the total trading volume of BTC on that day amounted to 7 billion. And for the entire 2018 through blockchain Bitcoin was almost a trillion dollars.
Yes, in the cryptocurrency ecosystem also has a Commission. The miners who process the blocks in the blockchain, transactions are usually sorted according to the size of the Commission. Usually you can choose between the slow and fast transaction, or cryptoservice do it on your own. However, the commissions differ slightly, and in the history of cryptocurrencies, there were cases when users were able to transfer huge sums practically for free.
See also: What would happen if all miners suddenly will no longer mine Bitcoin?
For example, in October 2018, one Bitcoin-the investor sent 29999 BTC (at the time about 194 million dollars) and was paid Commission just one cent. Since the processing of the payment in Fiat currency for a million dollars costs about 1 percent of the transaction, the shipment 194 million through traditional systems could easily cost hundreds of thousands of dollars.
Sounds great! I would like to know more about specific examples of the use of cryptocurrencies
Steadily growing popularity of crypto currency among people without access to banks or living in countries with high inflation.
Venezuela for several years, suffering from hyperinflation in the background of serious socio-political crisis. Whereas the national currency – the Bolivar – in 2018 experienced a dizzying inflation 80 thousand per cent, the trading volume of Bitcoin in February 2019 has reached a historic high. Venezuelans who were not able to accumulate savings in Fiat currencies quickly lose their value, and started buying BTC to confront the economic collapse. With weekly trading volumes on the p2p exchange LocalBitcoins exceeded 2000 BTC.
Meanwhile, the “UN women” – the UN Agency for gender equality and the empowerment of women – tests money transfers on the blockchain, to help those without access to banks to women in the camps of Syrian refugees. Due to this, refugee women are participating in the program “UN-women” Cash for Work can get the money directly, without third parties in the face of banks. The blockchain allows them to buy the products by scanning the iris instead of cash or cards. To access the funds, participants do an iris scan, which is then bound to the account on the blockchain.
It’s kinda hard. How can I use cryptopedia in everyday life?
In addition to decentralized cash transfers, cryptocurrency as a part of special programmes, can contribute to responsible consumption and saving money.
With stable growth mass adoption of cryptocurrency governments and businesses worldwide to legalize cryptopedia in various fields. For example, in the U.S. state of Ohio you can pay taxes in BTC, and in Prague you can spend a vacation without using traditional money as the Czech capital today, the most friendly to bitcoin. Here more than 150 sites accepting BTC.
Meanwhile, Dent Wireless with more than 14.3 million users use cryptocurrency to change the industry of mobile operators, creating an open platform for buying and selling mobile traffic. Customers in more than 60 countries can buy mobile Internet traffic and minute of conversation with Dent – a private token of the company, Bitcoin, Ethereum , or Binance Coin. On the other hand, traders can buy and sell mobile inventory on the exchange Dent the global market with mobile users from around the world.
Built-in apps crypto currencies also attract the attention of major infrastructure companies, in particular rail and air. For example, the German railway is considering the possibility of reward tokens customers who frequently use their services.
Sounds too good to be true. Are there any risks or disadvantages?
Despite all the advantages, you need to exert some effort to fully understand cryptocurrencies and start to sell them.
The first purchase of coins may not be as easy as it seems. First of all, we need to learn to understand how cryptocurrencies work. You need to know about the blockchain, the public and private keys, secure cryptomeria and also, of course, about the different coins. When you decide which asset you want to invest, you also have to choose the stock exchange or purse, comparing the policy and the Commission.
All this will help our Cryptocurrency Bible, please read.
This preliminary work can be somewhat challenging for those who are not familiar with information and financial technologies, especially for older people, for which cryptocurrency is clearly not the best way to make micropayments. Buying coin kriptosistem should understand the risks associated with high volatility. If you want to translate a substantial amount or to pay for services, it is necessary to follow the courses.
Finally, you need to understand that cryptocurrencies, despite all the efforts of the industry, prone to break-ins. Sometimes losses are caused by human error, as in the case of QuadrigaCX, a major canadian stock exchanges, whose clients lost most of their money after the sudden death of the founder.
In our cryptodata of hontarov you will find lots of other useful information. Look.
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