A Look at How Digital Currencies Are Disrupting Business & Banking (It’s About Time!)
Digital currencies are changing the way money transactions are handled. They are a disruptive force to be reckoned with, a great equalizer for smaller businesses. Even though these novelty cyber coins are still in their infancy, their popularity has spurred the gold rush of the digital era.
Paragons like Bitcoin make headlines daily and spark the attention of investors, ordinary users and banks alike. Nobody can ignore the way in which they affect money transactions and drive innovation and growth. So, it is clear that cryptocurrencies are a game changer, viable alternatives to traditional cash and credit card payments.
Fast and safe transactions
There is something effortless and smooth about crypto transactions. In a sense, it is as simple as sending an email. You can, for instance, send money directly to your family on the go, through your mobile device.
Compared to cryptocurrencies, banks move money rather slowly. Namely, international bank transfers can take days to complete, which is a real hurdle for those in need of speed. With Bitcoin, the true pioneer of digital currencies, transactions take place much faster and there are no country-specific clearing houses involved. Instead, several protocols are used to ensure safety, and the costs involved are minimal.
This can work miracles for startups with cash flow difficulties and help them conserve funds. We have mostly the distributed ledger and blockchain technology to thank for this. Here lies one of the main advantages of utilizing digital payment gateways. Digitized assets can be moved in an automated way and at the same time, smart contract mechanisms ensure you do not get swindled in the process.
Of course, the blockchain, which lays the foundations for transactions, also requires financial instruments in order to make everything run like clockwork. Escrow is one of the most common methods of exchanging digital currencies. It means that the money is disbursed by the third party only after the buyer receives what was purchased. What is more, authentication of the transaction is carried out by multiple individuals. Once that happens, the payment cannot be undone.
Furthermore, note that the blockchain technology is a highly transparent and decentralized system of nodes and users. No bank or government wields power to interfere or manipulate the way transactions are handled. The information is sorted and transmitted digitally, via a matrix of nodes that constitute the network. This is nothing short of a democratic revolution of money transactions.
Problems in heaven
It must be said that not everything inspires optimism. The volatility of the market is one inherent flaw that turns many users and investors away, toward more stable and liquid frontiers. Therefore, we are still a long way from currencies like Bitcoin becoming industry standards. This currency has undergone a series of wild spikes and crashes, but there is a wide array of alternatives, some of which are poised to take its throne.
Ripple is one of the top contenders, which offers fast transfers of funds from one currency to another, using the most efficient pathways possible. Nowadays, you can easily buy Dash as well, an altcoin with a $6.7 billion market cap. There are platforms that enable you to browse, sell and buy listings using a feedback system, which helps you make informed decisions. Let us not forget Ethereum, which is hailed by many as the next king and is the epitome of fast deal-making based on smart contracts.
Into the future
Despite some big detriments, cryptocurrencies and mobile payment platforms are spreading across the globe, including developing countries. After all, digital coins pose a way for business owners without conventional currencies to tap into the market. Moreover, they provide means of maneuvering around financial roadblocks such as high inflation. It also helps that owning cryptocurrencies is safer than carrying a lot of money around.
All in all, the barriers of entry are almost nonexistent: the playing field has been leveled. Small businesses can break into territories that used to be dominated by banks and other financial giants. Even people without bank accounts can start trading digital money and earn a hefty profit that way. Startups are in a position to engage in international transactions without the need to go out of their way researching or acquiring capital.
Hence, cryptocurrencies are likely to accelerate growth across industry sectors. We are yet to see seismic shifts in the banking sectors, but reputable financial institutions have expressed their willingness to implement Bitcoin and change models of operations. Barclays has already incorporated the blockchain technology. The adoption will grow further as more and more entrepreneurs break away from conventional systems, but there are still some major obstacles to overcome.
Digital money will make the world go round
Cryptocurrencies offer a seamless way of buying and selling fit for the booming digital age. In a relatively short period of time, they have made big waves in the global ecosystem. Growing markets and startups are already riding the tidal wave, while established corporations and banks are slower to adapt.
Nevertheless, we expect to see faster adoption, growth, and expansion of international commerce. You could say that cryptocurrencies are transforming the way we perceive, use, and save money. They are safe money for the poor and a lucrative proposition for the rich. The future of money is now.