How Crypto Evolved into a Formidable Alternative to the Traditional Financial System
Bitcoin, the world’s first and largest digital currency, was born in the aftermath of the 2008 financial crisis. The first block ever mined on the Bitcoin blockchain famously included the text, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks,” and is believed to be a reference to the prevailing global financial crisis at the time. Roughly ten years later, the cryptocurrency ecosystem has ballooned into an industry worth $260 billion and proven to be a fundamental re-imagination of money.
In this post, we take a look at how the cryptocurrency ecosystem is growing into an alternative to the traditional financial system.
American consultancy firm, Edelman, found that the financial services sector is the least trusted at a mere 57%. Governmental distrust also remains high in many countries suffering from adverse economic effects such as hyperinflation. When these two factors are considered together, it is easy to see why many are hoping for decentralized digital currencies to succeed. Unlike fiat, cryptocurrency prices are driven entirely by the principle of supply and demand and cannot be manipulated against people’s interests.
Cross-border payments is yet another pain point for many users of traditional finance. International wire transfers are known to take anywhere from a few days to several weeks to complete, regardless of whether they are initiated by an average individual or a company worth billions of dollars. With cryptocurrency, however, payments can be near-instantaneous as they do not have to be approved or authorized by multiple intermediaries and third parties. Ripple, in fact, is working with many of the world’s largest banks to improve cross-border processing times at a lower cost by integrating its blockchain-based platform, xCurrent, into existing settlement systems.
For many far-flung or developing regions, the infrastructure for a robust banking system does not exist yet. Having said that, the World Bank estimates that even though 1.7 billion adults today remain unbanked, approximately 75% of them have access to a mobile phone. Anyone with a smartphone and an Internet connection can create a cryptocurrency wallet for free and make or receive payments thereafter. In stark contrast, banks and other financial institutions need to be physically present in a region for people to take advantage of them.
Emerging technologies, including cryptocurrency and blockchain-based decentralized apps (DApps), have the potential to bring people into the financial system, even in the absence of a trusted central authority such as a bank. However, the lack of technical literacy is yet another hurdle that could prevent crypto adoption and usage on a wider scale. To address this problem, some of the largest consumer electronics companies such as Samsung and HTC have made these technologies more accessible by shipping their latest smartphones with cryptocurrency wallets and DApp marketplaces.
Furthermore, blockchain-based products are spearheading adoption by offering the unbanked an opportunity to participate and earn within the cryptocurrency ecosystem. Alluva, for example, is a free web app that allows anyone to earn rewards by predicting the price potential of various digital currencies. Rewards are paid out in the form of Alluva tokens (ALV) and can be either traded for other cryptocurrencies or redeemed for products and services on partner websites.
With several governments, political alliances and even central banks embracing the potential of digital currencies, it is likely only a matter of time before the technology reaches critical mass. Over the next few years, banks and financial institutions may very well be unable to compete with the sheer scale of the crypto sector.
For more interesting content on the blockchain and cryptocurrency sector, follow our Medium account here. To earn your first reward with Alluva, get started by signing up for an account and creating a prediction here. If you have any questions related to Alluva, feel free to drop a message in our Telegram group here. Lastly, feel free to follow our Twitter to stay up to date with the latest from Alluva.
Published at Tue, 17 Sep 2019 10:11:37 +0000
Bitcoin Pic Of The Moment
✅ This image from Marco Verch (trendingtopics) is available under Creative Commons 2.0. Please link to the original photo and the license. 📝 License for use outside of the Creative Commons is available by request.
By trendingtopics on 2019-03-27 10:38:44
