Although we have been using money for centuries, we have yet to invent a flawless medium of exchange. Currently, fiat currencies are at the center of the financial world.
Tamara Backovic is a content specialist contributing to various niches, from IT to Finances, writing and organizing enticing content and transforming tiresome data to enthralling stats and infographics.
That is why the 2008 financial crisis was such a pivotal event. Among its many lessons, it was a harsh reminder that a centralized monetary system does not guarantee wealth preservation and, ultimately, it can cause widespread poverty.
But, a promising alternative to fiat money rose from the ashes of this economic disaster. Cryptocurrency. It is an electronic medium of exchange that uses cryptography for secure financial transactions.
According to Fortunly, cryptocurrencies were not the first digital currencies. The site’s infographic below depicts the different forms of electronic cash that have been in existence since the ‘90s.
What separates cryptocurrencies from their predecessors, though, is blockchain, the technology on which they were built. Blockchain is a decentralized online ledger. It consists of financial records linked to cryptography. By definition, it is independent of any central authority, eliminating the need to trust a single or several corruptible entities to facilitate payments and stabilize the value of money.
The first cryptocurrency was Bitcoin. Since it was introduced by Satoshi Nakamoto a decade ago, the number of crypto assets has reached thousands.
Although less than 1% of the world’s population actively uses cryptocurrency, there is no denying that it has been making a dent in the hegemony of fiat money over global finance, slowly but surely.
The Inclusion of the Unbanked
The invention of cryptocurrency has opened doors for the world’s over 1.7 billion unbanked adults. Without bank accounts, these individuals have no access to traditional financial services in the financial world.
Thanks to cryptocurrencies and digital wallets, the unbanked can now send electronic remittances and avoid the dangers of cash-based transactions. The availability of the Internet and the pervasive smartphone usage have enabled anyone to receive, spend, and store money through mobile channels.
The Rapid Growth of the Blockchain Industry
The commercial viability of blockchain is not lost on major financial institutions. In fact, 77% of them want to implement the technology by 2020. Sixty percent of traditional banks would partner with tech startups to accelerate innovation. Also, 82% of the incumbents expect such collaborations to expand in the next three to five years.
The Proliferation of Bitcoin ATMs
The trade of crypto assets is becoming much easier with the rise of Bitcoin ATMs. These Internet-connected machines accept cash deposits and bring the ability to buy and sell the cryptocurrency to the street level.
As of June 2019, there are at least 5,000 Bitcoin ATMs located in about 90 countries. That month saw an average of 150 kiosk installations per day. Half of all the Bitcoin ATMs in the world (3,229 to be exact) are scattered across the United States.
The Spillover Effect onto Other Fields
The cryptocurrency disruption is not only felt by players in the financial world industry. Chat platforms, auto dealers, and cloud-driven businesses have been benefitting from the practicality of blockchain and crypto assets.
Furthermore, even governments have launched their own blockchain projects to improve public service. Smart cities like Dubai are excellent examples of this.
The concept of cryptocurrency is relatively young. Despite all of the disruption it has caused thus far, we are just scratching the surface of its full potential. Check out the infographic below to learn more about its recent advancements and past controversies.