Cryptocurrency needs no introduction, as its popularity has gone over the moon in recent years. It is a type of digital currency that can be used to buy goods and services or to earn profits while doing so. Blockchain technology is used to run all cryptocurrencies. Blockchain technology is a decentralized technology that traces and records the history of transactions. It was over a decade ago that Bitcoin, the first ever cryptocurrency, surfaced on the planet. The concept was presented by Satoshi Nakamoto, however, the developer of Bitcoin chose to stay anonymous.
This invention was invested in response to the 2008 banking financial collapse and to use it to make daily transactions that would not have the limitations posed by the traditional way of banking. There are more than 6700 types of cryptocurrencies in the world at this point in time. Many are still in their trial phases. This alone is enough to show its widespread popularity in the world. However, one thing that needs special emphasis here is that cryptocurrencies not only tend to benefit the user but also the developing world. There are a number of ways how it does so.
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Cryptocurrency and the developing countries
Since the very beginning, cryptocurrencies are often linked to playing the role of an instrument that supports the growth of developing countries. There is a common belief associated with this that cryptocurrencies can be regarded as a way that can help in the financial inclusion of struggling economies into the mainstream economic structure. It can help people overcome poverty because limited financial access is one of the major reasons behind poverty. This will support the process of growth in developing countries as it will give people an opportunity to protect themselves in a situation of financial shortages of any sort. This in return helps in the growth of the economic development of a particular state.
With the absence of cryptocurrencies, the local fiat currency would often be exchanged into currencies like US Dollar, Euro, etc. It must then be converted into the target currency and this too because usually there is no liquid market for the exchange of fiat currency to the target fiat currency. This entire process can be optimized by the use of cryptocurrencies which would not only fasten the entire process but will also be cheaper which can turn out to be a huge advantage for the economies of the developing world.
Additionally, cryptocurrencies can also play their role in solving the problem regarding participation in international trade without the compulsion of having a bank account. For this, cryptocurrencies can help not only individuals but businesses to promote small-scale international trade. To sum it up, cryptocurrencies can be used to strengthen social trust and can help fight against corruption through a more transparent contract system. Previously, many countries were reluctant in adopting cryptocurrencies citing the fears of money laundering because of the anonymity of transactions. However, now with the progress in this field countries are amending their policies to gain more and more advantages.
How is Cryptocurrency linked to being a hedge against inflation?
Crypto is often seen as an alternative method for the protection of inflation. Some time ago, cryptocurrencies were looked upon as being counterintuitive due to being volatile. They have been widely successful in maintaining their stock market, unlike oil that tends to be the basic commodity. The value of oil has seen some drastic downfalls due to insufficient demand and widespread production. This became a reason for the origin of the negative value of oil. Taking Bitcoin as an example here, we know how its inflation rate is reducing every four years due to the block halving after the successful mining of 210,000 blocks.
To sum it up, cryptocurrencies are unlike most of the inflation hedges found in present times whose value is entirely based on the will of the people to hold it. Crypto backers express how the cryptocurrency is likely to remain popular with especially the investors, who think of it as the store of value during the time when inflation prevails. Moreover, many individuals are practicing crypto trading which has helped in promoting a good word about cryptocurrencies. Traders use platforms like the bitqs app to conduct more profitable and sustainable rates. The increasing worth of cryptocurrencies has given an opportunity for traders and investors to amass hefty profits and bring more revenue to their countries. This opportunity goes a long way in providing financial independence to many individuals.
