What are cryptocurrencies, and why are they the future?

Cryptocurrencies

Many things change all the time, and money is one of them. If you look back at the last 20 years, you will realize that money has changed tremendously. People have been using cash for a long time, but then came the payment cards, then came contactless payments – and now we are transitioning towards cryptocurrencies. It is a very interesting time to be following this development.

It all started with Bitcoin

An unknown person, group or entity named Satoshi Nakamoto released Bitcoin back in 2009. The world had never heard about cryptocurrencies at that point, and as you probably know, it took the world many years to really start using the Bitcoin protocol and the cryptocurrency bitcoin (BTC).

Today, most crypto trading occurs with bitcoin or Ether. These currencies are the most popular at the moment, and Ether has gained a lot of traction in 2021. It is not easy to tell why, but the transition towards Proof of Stake has probably played a major role in this.

Why do people need cryptocurrencies?

Cryptocurrencies are needed because of various reasons. First and foremost, not everyone has access to the global banking system. In many developing countries we see people without bank accounts, and they can therefore not participate in the global economy. It might be easy to say that workers in those countries should find an online job because there is a great demand for that kind of people. But if you are not able to receive the payment for a completed job, then it is not viable.

To open a bank account, you need to provide a lot of documents. Sometimes you might not be able to provide these documents. In other cases, you are straight up not allowed to receive money from other countries because of some local rules. When it comes to cryptocurrencies, there are no rules. Everyone can open an “account” by creating a wallet, and you do not even need an internet connection to do that. This concept solves many problems, and because of its decentralized nature, no one can impose direct restrictions on it.

Converting crypto to cash

It is very easy to convert cryptocurrencies to cash, as people are very interested in converting their cash to crypto. You are able to find a lot of groups on Facebook that have the goal of matching buyers and sellers of cryptocurrencies. This is true P2P trading. However, there are also some established websites that facilitate the same thing. Notable examples are LocalBitcoins and Binance P2P.

Holding cryptocurrencies is very easy

As mentioned before, everyone can create a wallet. You do not need an internet connection to do it, but it helps a lot. A wallet can also be installed on a mobile phone, which makes it even easier for people to get started. Some people prefer stable currencies, which means that they do not want to take on the risk that bitcoin or Ether introduces. To combat this, stablecoins have been introduced. These represent US Dollars on the blockchain, and people are using them a lot. You are now able to store US Dollars on your mobile phone and sell them for US Dollars (cash) anywhere in the world without having a bank account. This is the beauty of crypto.

Sebastian

Sebastian was born and raised in the busy city of Abbottabad. As a journalist, Saad Mushtaq has contributed to many online publications including the PAK Today and the Huffing Post. In regards to academics, Saad Mushtaq earned a degree in business from the Abbottabad UST, Havelian. Saad Mushtaq follows the money and covers all aspects of emerging tech here at The Hear Up.Thanks