1. Decentralised - no requirement for a central authority
As most cryptocurrencies work via a peer-to-peer network, the digital currency is decentralised, meaning that no central authority, the government and the central bank is needed. This has many beneficial results:
- Decentralisation entails cryptocurrencies to be resistant to any interference of the government and its monetary policies which can have disadvantageous effects¹.
- Decentralised currencies are not inflationary or deflationary.
- As cryptocurrencies are not pinned down to central banks, there is no risk of bank failures and collapses. Thus, cryptocurrency users do not have to put all their trust into one institution.
Note that actually all the following arguments are connected to the fact, that most cryptocurrencies are decentralised, but since those arguments are pretty expressive themselves, we have decided to list them as individual points.
2. No or very low fee
- Users are not confronted with extreme bank policies or abundant bank fees
- Transactions and payments are irrespective of borders and thereby also exchange rates. Therefore decentralised cryptocurrencies do not undergo any devaluation.
- Cryptocurrency transactions are not charged. Incase of charges (coinbase), the fee is much lower than with fiat money or other electronic payment systems, especially PayPal.
⟹Theoretically speaking, cryptocurrencies work on a universal basis (or would, if cryptocurrencies reach full acceptance).
3. Simpler and more efficient transfer
While a transfer with cryptocurrencies is most of the times completed within 10 minutes, a transfer with “normal” money takes much longer. This is due to the immediate process of mining, which always takes place, as opposed to a bank with set working hours and closings on Sundays or non-business days.
4. More secure and reliable no identity theft and minimal risk of fraud
Transactions are almost not possible to counterfeit, due to the high cryptographic complexity that is behind cryptocurrencies. Credit cards function on a “pull” mechanism, meaning that payee takes the money from your account by having access to your credit line. Cryptocurrencies, on the contrary, work on a “push” basis, as most cryptocurrencies can be directly sent without additional information. An acceptation would be maybe for the public key², which is however impossible to reverse back to the privat key from which it is deduced.
5. Easier access³
Around to 2.2 billion people have access to the internet and mobile phones, while being unable to be a part of the conventional exchange system as they probably belong to a unbanked or underbanked population. All a cryptocurrency requires, is a wallet, which is virtual and easy accessible to those with internet access.
6. More privacy
There are many different reasons why one would like their financial belongings to be completely private and some of those reasons should probably also be comprehensible. Additionally, a question that should be raised is, if it has to be justifiable if someone wants their finances to be private. Many cryptocurrencies guarantee this privacy, since all that “identifies” you is a public address.
¹ To learn about the risks or potential disadvantages of monetary policies visit:
² For more information on public and private key see:
"How does it work?, Cryptographic keys and the digital signature"
³ You want to know more about the global reach of cryptocurrencies?
Look at: "Cryptocurrencies in globals terms"
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