Why is cryptocurrency needed and its advantages over fiat money

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What is cryptocurrency for

Cryptocurrency is one of the types of digital currencies, transactions with which are based on cryptography methods and a proof-of-work scheme, that is, proof of a certain work. The system is decentralized and does not have a clearly defined center, and crypto-money transactions are as irreversible as cash transactions. The software runs on the open source Bitcoin system. And what is cryptocurrency for? Many people ask this question, and we will try to deal with it in the framework of this article.

It cannot be forcibly returned to the owner in case of an error, but it is possible to make payments with the participation of an intermediary. In this case, the transaction only takes place when all three parties have confirmed the operation. Therefore, you have some time to determine the correctness of the payment sent. Crypto coins cannot be frozen or removed without access to the owner’s secret key.

The first crypto money appeared in 1990 in the DigiCash system and were invented to anonymize ongoing transactions. But the first system was centralized and went bankrupt in 1998. And for the first time, the term “cryptocurrency” was used by the Bitcoin system, which appeared in 2009. It was from this time that the rapid development of cryptographic payment methods on the network began. Three cryptographic systems are most popular today: Bitcoin, Litecoin and Namecoin.

Why cryptocurrency is needed in simple words

Crypto signs have all the same functions as real money. You can buy any goods in stores that accept crypto money, you can transfer funds without any payment systems, exchange for real or electronic money, give, invest and make donations. At the same time, the fees charged for certain actions with crypto signs are much lower than for any electronic payment system, and the payments themselves are easier than paying with an electronic card.

Do buyers need cryptocurrency

Everyone wants to buy profitably. Cryptocurrency gives anyone this opportunity, thanks to its special properties:

  • When paying for goods you do not have to fill in many fields, as when paying by credit card. All payments are carried out in one click and take a minimum of time.
  • Due to the lack of significant commissions, traders can lower the price of their goods.
  • Cryptocurrency transactions are anonymous. You will keep any purchase confidential.
  • Crypto coins cannot be stolen or frozen. You have a personal key, without access to which no one can withdraw your funds. Payment is made directly to the seller’s account, bypassing any intermediary accounts and payment systems. Everything looks the same as when paying in cash.
  • The more you use cryptocurrency settlements, the higher its rate. That is, by buying, you increase your well-being.

What is cryptocurrency for sellers for

For the seller, the use of crypto money also promises considerable benefits:

  • Payment cannot be withdrawn. If for some reason your buyer decides to return the paid goods, he will not be able to do so.
  • Commissions for operations are negligible, which reduces the price of their goods, thereby increasing their turnover.
  • You can convert crypto signs into cash for only 0.5% of the amount converted. This will protect your funds from fluctuations in rates.
  • Cryptocurrencies are universal, so it becomes possible to accept direct payments from any country in the world.
  • The maximum payment deadline is only one hour. But usually the transaction is much faster.
  • When making payments, there are no intermediaries taking interest on the transaction.
  • Payments are made directly, without using any services. To start accepting payments in crypto signs, you do not need to depend on service centers or banks.

Advantages of cryptocurrencies over traditional security systems

Cryptocurrency has significant advantages not only over cash, but even over gold, which until now was considered the most reliable security:

  • Circulation in the territory of any state without the need for currency exchange, as is the case with cash.
  • The inability to fake, and the crypto network is insured against fraud.
  • Cryptocurrency is protected from devaluation. Since this is a decentralized system, no government in the world will be able to issue extra crypto signs, thereby collapsing courses.
  • Crypto signs, unlike gold, can be divided into small amounts.
  • There is no need to weigh, determine the purity and content of impurities, to prove the authenticity and origin.
  • Ownership of crypto money cannot be outlawed, as has been repeatedly done with fiat money or gold.
  • Gold cannot be paid over the Internet, and electronic payment systems using simple currencies charge large commissions.

 How to get cryptocurrency

Crypto signs can be bought for cash. To do this, you need to register on a cryptocurrency exchange, for example Eksmo, open a personal account for free, replenish it in a way convenient for you and you can purchase the required number of cryptocurrencies.

Possible risks

By investing in crypto signs, you carry certain risks, which, among other things, applies to any other type of investment. Although these risks are minimal, you should be aware of them:

  • There is always the possibility that not your crypto sign system will become more popular. In this case, their cost will decrease significantly.
  • Circulation of cryptocurrencies in a certain country may be prohibited at the state level. The probability of this event is extremely small, but every little thing needs to be taken into account.
  • Vulnerabilities can be detected in encryption algorithms, which will entail massive theft of crypto signs.
  • The cryptocurrency protocol can carry an incorrigible defect.

Comparing the opportunities and advantages of cryptocurrencies with possible risks, it should be noted that the benefits of using crypto signs significantly outweigh the probability of losses. No monetary system has such protection and convenience as cryptographic. The benefits are impressive, and the risks are minimal, which makes crypto signs the most profitable currency today and defines great prospects in the future.

 

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