In the two years of the pandemic, there have been many shifts within the financial services. The usage of online platforms for carrying out transactions has accelerated. Moreover, the number of people willing to go a step further and open digital wallets has also seen a rise. Statistics show the global user base of cryptocurrency observing a 190 percent rise between the years 2018 and 2020.
That being said, let’s take a look at why it is predicted that cryptocurrency could replace the traditional payment methods.
Why Is It Possible?
Talking facts, as long as the sender and receiver agree, anything can qualify as money. Many people, along with famous and world-renowned companies like Tesla, have started to normalize crypto payments. This has made cryptocurrency become the present and proves that it might be here to rule the financial world.
A few years back, nobody would’ve thought that you could use cryptocurrency for purchasing even a simple thing like pizza. Fast forward to today; you can purchase electronics and even cars with your digital wallet. It may not be possible to pay directly with crypto at the moment, but there are many other alternative ways to get the job done.
Why Is Crypto So Popular?
Crypto tends to have the potential to shape the future, which is why it has become a hot topic of discussion. Among the many reasons behind the rising popularity of crypto, the low fee involved is perhaps one of the prime ones. If you use other types of online payment options, you would be bombarded with a hefty transaction fee for every transaction you make. With crypto, you can save yourself from this hassle.
In addition to that, you might already know that crypto isn’t associated with world governments, which gives it the power to remain stable even if the country is in a state of turmoil. This is among the top reasons behind investors seeing crypto as a great way to protect their wealth.
Moreover, the massive potential of profits that people can gain by trading in crypto is another reason behind its increasing popularity.
How Does It Makes People’s Lives Simpler?
Cryptocurrency makes the life of people simpler in several ways, some of which are listed down below.
- Great Investment Tool
Starting with the obvious, cryptocurrency is a great investment tool. While many people are scared to move their fiat money into Bitcoin or any other cryptocurrency, others are generating huge profits with it.
- Low Transaction Fee
Everyone in today’s world has to do transactions. For some, the frequency of the transactions may be as low as one transaction in a few weeks, while for others, it may be multiple transactions in one day. If you make these transactions via traditional means such as Western Union or any bank, you may be charged as much as 15% of the amount as a transaction fee.
However, if the same transactions are made in Bitcoin or any other crypto, the transaction fee would be a fraction of that 15%. Hence, you’ll be able to save quite a lot of money.
- Online Purchases
You may not know it, but you can purchase many different things using your digital wallet. Whether it’s food, electronic products, or clothing items, you can purchase anything with crypto. If not directly, you can purchase gift cards with crypto and redeem them at the respective stores.
One example of a gift card is the Dunkin gift card from Coingate, which can be bought with crypto and can be redeemed to fulfill your donut cravings.
Possible Advantages to a Crypto Future
The prime advantage of cryptocurrency over other existing currencies is the limited supply it has. Hence, it becomes impossible for any central authority to control it and issue it in quantities that would devalue it. Therefore, cryptocurrency becomes considerably less vulnerable to hyperinflation crises.
Another advantage of cryptocurrency would be that all transactions would be permanent and immutable. You may not know it, but banks can expropriate money from their users and claim it never existed. However, that’s impossible with crypto, as the database – blockchain – on which the recorded transactions can’t be edited.
Disadvantages If Cryptocurrencies Replace Cash
It is evident by now that crypto tends to have a limited supply. Even though this limited supply presents the advantage of being less vulnerable to hyperinflation, it also makes it impossible to control deflation. Hence, this can lead to different economic consequences.
Moreover, the usefulness of cryptocurrency as a store of value is limited due to its volatility. It may increase or decrease, which can cause you to suffer loss as well.
Conclusion
Even though crypto presents many different advantages over existing fiat currencies, it is hard to say that it will replace them entirely in the near future. As of now and in the near future, the co-existence of both would be pretty practical, but there is a considerable amount of time before crypto can replace the traditional payment methods entirely.
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Source: https://thecryptobasic.com/2022/05/09/is-cryptocurrency-going-to-replace-traditional-payment-methods/?utm_source=rss&utm_medium=rss&utm_campaign=is-cryptocurrency-going-to-replace-traditional-payment-methods