From being referred to as “digital gold”, cryptocurrency is slowly becoming more and more legitimate. However, the stigma still remains in some circles that digital currencies are a bubble waiting to burst or simply illegal. We will explore these beliefs and look at how they hold back mass adoption of cryptocurrencies
The “digital currency” is a type of digital asset that uses cryptography to secure its transactions. Digital currencies are becoming more popular as the value of traditional currencies continue to decrease. The “digital currency” has been criticized for being too volatile and risky, but it is also gaining popularity because of its potential for innovation.
The general acceptance of cryptocurrency is on the verge of happening. Many individuals, however, still have erroneous anxieties that they must conquer. Crypto has elicited equal amounts of apprehension and excitement from its inception and during its bumpy road to mainstream acceptance. The moment has come to protect digital currencies after the years of unjust treatment they’ve received.
Unfortunately, first impressions matter when it comes to cryptocurrency. In its early years, Bitcoin (BTC) had an unfavorable image as the money of choice for most criminal activity. Drug traffickers, dark web users, money launderers, and ransomware hackers all used it.
However, since the first Bitcoin was generated in January 2009, the world has evolved. According to crypto data-tracking company Bitinfocharts, there are already over 18 million in circulation, and at least 90,000 individuals have invested $1 million or more in bitcoin.
There are indicators that cryptocurrency is finally getting public acceptance. In September 2021, El Salvador made bitcoin legal money, and the first Bitcoin futures-linked exchange-traded fund (ETF) in the United States began trading on the New York Stock Exchange in October.
In this backdrop, Visa, the world’s largest payments company, created a Global Crypto Advisory Practice in December 2021 to assist financial institutions in their cryptocurrency journey. In Afghanistan, there is speculation of bitcoin becoming a medium of exchange, offering a real-world example of cryptocurrency facilitating financial transactions in a circumstance when the monetary network is failing.
The Obstacles And Barriers
Despite all of these successes, the public has lingering misgivings, and many politicians have voiced their opposition to a decentralized currency that puts the people in command of their money. In September, China outlawed cryptocurrency transactions, citing concerns about money laundering and gambling.
Politicians all across the globe have voiced concern that it has the ability to alter the present financial ecosystem’s dynamics. Dread is at the root of everything, and new study suggests that it may be a fear of the unknown.
According to a nationwide poll commissioned by money app Ziglu, roughly 31% of British people are interested in investing in cryptocurrency, but 62 percent have resisted buying any digital assets because they don’t comprehend the young sector.
Nonetheless, the poll found that bitcoin is now regarded a better investment than property, indicating that crypto is gaining credibility in the eyes of the general public. While there are numerous hazards associated with cryptocurrency, now is an excellent moment to grasp that it is also a force for good in the larger world.
In an era of falling savings rates, the relatively new asset class allows everyone, whatever of their financial situation, to invest in crypto without having to overcome any of the typical obstacles that present in traditional banking.
Some people do not even have a secure location to save their hard-earned money. According to World Bank figures, up to 1.7 billion individuals worldwide do not have a bank account.
Most people take for granted the ability to send and receive money through bank transfers and credit cards; sending large amounts to relatives and friends with a single touch on a smartphone; but this is not feasible for the unbanked.
Over 80% of the world’s population has a smartphone, which they may use to transmit bitcoin remittances across international boundaries. Crypto now claims financial inclusiveness by allowing millions of individuals who do not have access to systems such as Venmo and PayPal to send money for pennies.
Notably, it is an excellent choice for those who object to high bank fees since, unlike conventional payment rails, the new infrastructure is not constrained by corporate motives.
The Advantages of Crypto
Smart contracts may take the role of legal services, banks, and money transfer companies, while cryptos and digital wallets can provide customers with freedom and financial sovereignty without the need for a centralized body.
Cryptocurrency may help protect individuals from financial difficulties. Venezuela is an excellent example, where the majority of residents are already suffering from tremendous inflation and the effects of US sanctions, which have a significant impact on their banks. They mostly convert their salaries into cryptocurrency and use the blockchain network to send and receive money.
Because the community can follow all bitcoin transactions in the public ledger anytime individuals use the crypto to move money, Bitcoin is a perfect tool for underdeveloped countries to do rid of corruption.
Closer to home, bitcoin is also democratizing finance. There are few hurdles to entry, and you don’t need a broker or a lot of money to get started. Anyone may invest and build a substantial amount of money for themselves. People seem to be learning about lending and borrowing, annual percentage rates, the history and function of money in that environment.
Crypto’s Weaknesses
Any justification of cryptocurrencies, however, must address the elephant in the room: criminality. Although it has long been associated with fraud and ransomware, blockchain is a perfect mechanism for combating these illicit activities.
Cryptography is pseudonymous, not anonymous. Law enforcement can follow and trace the movement of cash in real time because to the open ledger on which bitcoin lives and travels. This provides unexpected insight into financial transactions.
Criminals must also convert cryptocurrency to fiat cash, creating possibilities to not just blacklist wallet addresses but also to arrest criminals in the process. As a result, law enforcement was able to monitor and finally collect the ransom payment in the Colonial Pipeline ransomware assault in the United States in June 2021. Only because crypto was used as a payment method was the recovery feasible.
Blockchain has the advantage of being tamper-proof. Every transaction is independently validated by several parties using the consensus mechanism. All entries are immutable, meaning they can’t be changed but may be updated by adding an addendum.
We are now advocating for the creation of a cybercrime law enforcement unit. Why is it required? To have committed human and technological resources that can engage proactively with businesses that have been hacked and a ransom in cryptocurrencies has been demanded.
It would be able to interact with and alert all cryptocurrency exchanges, allowing them to determine when and if the illegal or unlawful individual want to withdraw funds from the exchange. Another legitimate concern about crypto is its environmental impact: the massive amount of energy required to generate proof-of-work currencies like bitcoin necessitates the constant operation of warehouses full of expensive computer machines.
All of this, though, is already changing. More than half of Bitcoin miners already utilize renewable energy. A BTC mining facility launched northeast of Niagara Falls, in the same location as the state’s last operational coal plant. It ran its rigs on inexpensive hydroelectric power.
Meanwhile, El Salvador’s President Nayib Bukele has proposed a more innovative idea to power its Bitcoin City project using geothermal energy from the Colchagua volcano. The path of cryptocurrency to popular acceptance is almost complete. As a result, now is the moment to face your anxieties and embrace the financial stability, flexibility, and convenience it provides.
Frequently Asked Questions
Why are digital currencies worth anything?
A: Digital currency is worth something because people believe that it has value, and digital currencies have value due to their scarcity. These two factors are the main reasons why bitcoin may be worth $15,000 USD whereas a dollar bill in your hand might only be worth 10 cents
Are digital currencies trustworthy?
A: It depends on what youre looking for. Generally speaking, they are more trustworthy than traditional fiat currencies because they act as a store of value and can be used to purchase goods without government regulation or central control.
