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The word "cryptocurrency" has become a buzz word in the last few years. You cannot open magazines, online articles without reference being made to it. This increasing popularity has made more people question its impact now and in the future.
Before we discuss the impacts of Cryptocurrency, let us first explain what it means. Cryptocurrencies are electronic money that is specifically designed to be used safely and securely. They are predominantly online and they make use of various technologies that convert information on transfers, purchases and balances into codes or passwords.
The adoption and use of cryptocurrencies have resulted in major changes in the traditional way of doing things. Let us discuss what way cryptocurrencies are changing the world.
In the area of money transfer
The method in which traditional banks transfer money to each other is archaic, time-consuming and expensive. It is even worse when it involves an inter-country transfer. Cryptocurrencies are eliminating this archaic and time-consuming method.
The use of cryptocurrencies ensures that all these issues are no more. Cross-border and national transfers can be processed immediately with little or no transaction fee.
Also, technologies have been developed that ensures that traditional currencies can be transferred as well. These technologies adopted means that there are no need for banks in carrying out transactions. Multiple transactions between foreign traders can be processed and validated instantly and simultaneously with little charge. It takes approximately about 4 seconds for each inter-country transfer to be validated using cryptocurrency wallets.
Global remittances
It is recorded that millions of people from third world countries that have moved to Western countries remit about $500 billion to their families back home yearly. This figure exceeds the foreign direct investment of countries. Traditional banks charge between 6-10% of all international transactions that are carried out through them. This high charge is a burden on these less privileged people.
There are different cryptocurrencies that can save them much more. These cryptocurrencies and their various technologies will allow them to make instant and free transactions. These transfers are carried out with no interference from any third-party. They are fast and secure.
Shift of power
The decentralized nature of most cryptocurrencies has eliminated the centralized traditional structure. It shifts the power to process and validate transactions from financial institutions to the people.
Transactions on Bitcoin and other cryptocurrencies are carried out in a ledger that lives on an independent network of the computer of the World Wide Web (WWW). Not only do cryptocurrencies shift power from government and financial institutions to the people, it also affords them the opportunity to carry out transactions anonymously without interference.
Some cryptocurrencies are open-source projects which mean that individuals can also add more features to existing ones.
Conclusion
The ways in which cryptocurrencies are changing the world goes beyond these three points listed above. There are other implications, some of them include; fast payment system, provisions of stability in unstable currencies, smart contracts and programmable money.