Cryptocurrencies are hear to stay, and one of the major reasons for this is that they have the potential to play a key role in helping the citizens of a country suffering from high levels of inflation.
Inflation is a phenomenon observed in the economy of a country and is related to the disorderly increase in the prices of most of the goods and services that are traded in their markets, for a prolonged period of time.
When it is presented, we realize that the amount of money that we had been managing for some time is not enough to buy the same as before and this affects us all: housewives, employees, producers, savers, investors, entrepreneurs, etc. And especially those who have less money and access to financial services.
Impact of Cryptocurrencies in Today’s Economy
Bitcoin, the best known cryptocurrency worldwide, which was created in 2009, has gone through an important period of growth. Thanks to this cryptocurrency, a whole new concept of digital transactions has emerged. At the time Bitcoin came to market, the traditional financial system was weakened by a recent financial crisis.
Today, Bitcoin is the most valuable cryptocurrency, and an increasing number of individuals and organizations have been using it as a mode of payment. We can now see a lot more signs such as “Bitcoin Accepted Here.” The flagship cryptocurrency can be used to pay for everyday services and items like cell phone service, buying domain names, gift cards, legal help, accommodation in hotels, etc.
The advantage of purchase / sale transactions with Bitcoin, is that there are no intermediaries, because the operation is executed directly. Although there have been reports of very long confirmation times with Bitcoin (BTC), some users says that their transaction is processed in approximately 10 minutes. This is quite good compared to transactions using the traditional banking system which may take a lot longer.
Bitcoin transactions are also considered to be quite secure, and provide an excellent way to exchange value in a decentralized manner.
Could Cryptocurrencies Save the Economy of a Country in Crisis?
The traditional economic system might have gone through numerous changes, but it is still heavily centralized and authority and control is disproportionally consolidated, with only a few people making all the decisions.
With its decentralized model, Bitcoin and other cryptocurrencies have the potential to put control back into the hands of the common man. Aristocracy, hierarchy, and the monopolistic nature of centralized organizations is not natural. While still in its infancy, Bitcoin and other cryptocurrencies have shown that their inherent design would be able to create a more economically balanced society.