Bitcoin and other Cryptocurrencies: Impact on the World Economy

New technologies have impacted people’s lives in many ways and the global financial system is not escaping this situation. The emergence of the digital world has transformed the way of seeing life around the world and is a tool that, today, covers many areas.

It is then that, seeking a solution to the financial crisis of 2009, the Bitcoin as a way to solve the collapse of the world economy.

Behind Bitcoin, other cryptocurrencies appeared, generating a virtual money model that has become an important alternative for the financial system. Well, virtuality is a trend that is becoming increasingly important in business worldwide.

Bitcoin and other cryptocurrencies

The first cryptocurrency was Bitcoin and it was created by Satoshi Nakamoto, a Japanese programmer who created the protocol and its reference software. To this day, Bitcoin is a benchmark for the rest of digital cryptocurrencies like: Ethereum, Litecoin, Ripple, Dogecoin.

Bitcoin is a currency that, like any other, is used to exchange goods and services, just like the euro and the US dollar. The only difference it has with the others is that Bitcoin is a virtual currency, an electronic currency.

It is stored in digital wallets or virtual wallets that can be carried on mobile devices, computers or on the Internet.

Bitcoin is a protocol that through peer-to-peer (P2P) technology creates a unit of commercial exchange, without the intervention of a bank or a central authority. Well the P2P networks they allow a direct exchange of information between two or more computers that are interconnected.

P2P networks are efficient in transmitting data and managing bandwidth, which generates better performance in connections. These attributes of P2P networks make cryptocurrencies electronic currencies that stand out for their security, efficiency and ease of use for commercial exchange.

Characteristics of Bitcoin and other cryptocurrencies

Let’s see what are the characteristics of Bitcoin and other cryptocurrencies that give it the distinctions of being safe, efficient and easy to use:

  • It is decentralizedIt is not owned or controlled by any State, country, bank, financial institution or company and can be used equally worldwide.
  • It is easy to acquire, since you can buy bitcoins with euros and other currencies and vice versa, like any currency.
  • Does not require intermediaries, since the transactions are made from person to person, directly.
  • It is not falsifiable, because due to a sophisticated cryptography system it is protected against duplications or alterations.
  • It’s private, because it is not necessary to reveal your identity when doing business, preserving your privacy.
  • It is accepted as a means of payment, which allows you to pay for internet services, telephony, consultancies, gift cards, online purchases and in general, the vast majority of electronic commerce.
  • It is not lockable, since the money belongs to you 100% and cannot be intervened by anyone, nor can the accounts be frozen.
  • It is not commissionable, since the transactions do not imply any cost for their realization.

So, cryptocurrencies are gaining followers every day, at all levels of the world economy. Because investors have found in cryptocurrencies many significant advantages over traditional currencies.

Acquisition of cryptocurrencies

To obtain cryptocurrencies it is possible to acquire them in an exchange house, through a bank account, buy them from another user or receive them as a means of payment. The most popular method for acquisition of cryptocurrencies, worldwide, it is through ATMs.

Well, it is the easiest way to enter physical money into the financial system and immediately obtain cryptocurrencies in a virtual wallet.

It is important to note that there is still no electronic money management culture, but that the popularity of cryptocurrencies is leading to its development.

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Can cryptocurrencies rock the world economy?

There is a diversity of opinions about the influence of cryptocurrencies in the financial system, but the truth is that technological development has made them quite visible.

There are many people learning about them and how to use them, because when they discover the characteristics of Bitcoin and other cryptocurrencies they find them extremely attractive and useful.

This is how technology is giving a great boost to the world economy for its metamorphosis through virtual currencies. As they are not regulated by any central or world bank, cryptocurrencies are becoming increasingly popular.

And the acquisition of cryptocurrencies, worldwide, has increased because they grant independence from situations or crises that surround the economies of developed countries.

These changes in people’s financial behaviors are already changing the way they transact and therefore are causing changes in the world economy.

Impact of cryptocurrencies on the world economy

In recent years, the recession of the great economies of the world has caused the devaluation of their currencies. Some have plummeted and with them, the capital of investors, who were terrified as their capital lost value.

In these scenarios, cryptocurrencies have been highlighted as an excellent alternative, given that:

  • The value of cryptocurrencies is absolutely unrelated to banks, they move based on supply and demand.
  • Digital currencies depend on themselves and the people who use them.
  • Users are a bank in themselves and the money they have, they move it as they want, according to the transactions they wish to carry out at a given moment.

Thus, thanks to these benefits, cryptocurrencies have penetrated into society and there are many who use these digital currencies to take care of their own capital.

Well, the situations of instability and global economic recession have led to the devaluation of traditional currencies such as the dollar, the pound sterling and even the yuan. This has led citizens to discover in cryptocurrencies, a opportunity to save your capital and keep its value intact.

The need to avoid crisis situations that can put individual capital at risk is undoubtedly one of the reasons for the impact of bitcoin and other cryptocurrencies on the world economy.

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