Since Bitcoin went into circulation in 2008 as the first crypto currency, international payment transactions have constantly changed in the direction of virtual currencies, which are increasingly questioning the significance of cash, but also gold and silver. After initial mistrust and great uncertainty regarding the cashless payment method, Bitcoin and Co. are now known to almost everyone and create new alternatives beyond inflation and economic instability.
Cashless payment is a worldwide trend, especially in times when online shopping and e-commerce are becoming more and more important and convenient global money transfers are becoming more and more important.
In addition, crypto-currencies such as Bitcoin, which has now achieved an incredible performance of 304 million percent in eleven years, but also alternative providers such as Tether, Litecoin or Etherium have other advantages over traditional currencies or commodities such as gold and silver, which make them increasingly sought-after.
The dwindling trust in governments and central banks as decision-makers on the value of a currency plays an important role here. Especially in China, investors want to protect their assets from the Communist Party, which is even less trusted than Western currencies such as the US dollar or euro. Decentralisation is the magic word here – away from the official financial institutions of a country and towards independently operating central banks
Gold and silver used to be considered crisis-proof currencies beyond inflation rates, but in the modern age, people are less and less keen to store their assets than precious metals, whose safekeeping costs space and money. For this reason, electronic currencies offer an attractive alternative. As with traditional commodities, the supply is limited – but not only by rare occurrences, but also by mathematical algorithms.
Another important advantage of currencies such as Bitcoin and Ethereum is also the saving of high transaction costs, especially in international monetary transactions, where fees are still high with conservative payment methods. Whether credit card, direct debit or Paypal – banks and other electronic payment methods always earn heavily, and even though Bitcoin’s fees have increased in recent years, they are still comparatively lower.
Anonymity has long been another important factor that made crypto-currencies so popular, but at the same time gave them a dubious reputation at first, as they were often used for drug trafficking or arms dealing.
In fact, all transactions are electronically stored and even public. Therefore, if regulated by the state, it could even help detect crimes.
Crypto currencies are also often used for gambling, because less personal input is required and deposits can often be made faster on the casino sites. This is because you can pay directly with Bitcoins instead of having to upload money from your account or credit card.
The future of crypto-currencies remains exciting, as much is technologically possible. Ethereum, for example, is not a pure crypto currency, but a comprehensive platform on which contracts can also be concluded, deliveries can be tracked and payments can be made with the actual electronic payment medium Ether by means of the “Smart Contracts” function.
Due to the constant increase in value of Bitcoin and Co. and the growing importance of block chains, one can look forward to the future of crypto-currencies.