Over the last year or so, cryptocurrencies have made some very big steps. For the first time, BitCoin is being met with true competition, and several other types of coin have hit the scene. Less money is being lost on these platforms than ever, with tighter security helping to avoid mistakes and human error. Of course, for those in the know, the most exciting trend can be found in the way that the market is viewing this sort of money, with more and more people taking it seriously everyday. Is digital money ready to take over the role of a traditional bank, though? It’s time to find out.
To begin, it’s a good idea to think about the way a cryptocurrency is supposed to work, and how the system is currently flawed. As a big part of its design, this sort of money is considered decentralized, meaning that there isn’t a governing body which is in control of all of the transactions and distribution they are involved in. There are a couple of flaws in this idea, though.
- Currently, each currency is traded separately, creating markets which are centered around one product. In the case of something like BitCoin, this gives one organization more power over the money than anyone else. This isn’t right, even if the degree to which is occurs is very small.
- Following on from this, with these currencies being traded separately, different exchanges can offer vastly different rates. This creates a monopoly over certain coins, and this shouldn’t be possible when something is truly decentralized.
Of course, this isn’t the only issue stopping cryptocurrencies from being able to take on full bank status, though. Along with this, there simply isn’t enough trust in the market for a system like this to work. Companies can’t give out loans on a platform which promote anonymity, as this makes it very hard for them to get their money back. Likewise, very few banks are recognising these currencies as legitimate, limiting their use to channels which are usually considered shady. As time goes on, this part of the problem is changing, and it is only a matter of time until people trust digital money.
This time may come sooner than expected, too, as there are a lot of companies working on ways to make this dream into a reality. For those willing to take a bit of a risk, you can buy Wanchain and similar cryptocurrencies at the moment, and this investment could prove to be massive. Along with this, though, it will be worth doing some research to make sure that you understand their work. This field is very complicated, and it isn’t worth investing in it unless you are sure you will get your money back.
Hopefully, this post will inspire you to start looking into the world of digital money. As time goes on, this sort of field is becoming larger and larger. With more currencies popping up everyday, it’s worth learning what you can while the iron is still hot, as there may not be much time to jump on the bandwagon.