Bitcoin, the world’s first cryptocurrency, was introduced in the wake of the 2008 financial crisis. Bitcoin had an ambitious goal: to create a decentralized currency that central banks or governments could not manipulate and compete with fiat. While its original vision has not yet been fully realized, cryptocurrencies have disrupted many industries since their creation in 2009. Here are four industries that virtual currencies have changed.
Financial Services
Financial services are one industry where cryptocurrencies can change things significantly. Many traditional banks and lenders dislike crypto assets because they allow users to transact without paying fees. However, there are other ways for traditional banks to profit from this technology.
General Purposes
In the financial services industry, cryptocurrencies are a great way to transfer money. They allow you to send money internationally with little to no fees and in a concise amount of time.
Cryptocurrencies are also a great way to store money long-term and grow your investment by purchasing more coins over time.
Finally, they can also be used as payment methods at local businesses or online stores that accept cryptocurrency payments.
Banking
Cryptocurrencies have the potential to disrupt the banking industry. That is because they are a new asset class that can be used as a means of payment and for remittances.
Cryptocurrency can also be used as alternative value storage, allowing you to hold your money in this form instead of keeping it in a bank account.
In addition, cryptocurrencies are decentralized systems without any central authority like banks or governments. As a result, they allow users to send payments with no middlemen involved, which reduces transaction costs and fees compared with traditional payment methods such as wire transfers or checks.
Remittance and cryptocurrencies
Remittances are a huge industry that keeps growing bigger every year. And that industry is only set to grow further as more people find themselves displaced by war, famine, and other tragedies.
Challenges of remittances include:
- Fees: The average cost of sending money through a traditional channel is roughly 10% globally, which can be more than twice as expensive as sending domestic funds within some regions.
- Speed: In many cases, it takes several days for funds to reach their destination. It can be especially problematic when there’s an emergency or urgent need for funds (such as medical expenses).
Crypto assets like Bitcoin allow users to send value anywhere in the world at almost no cost and near-instantaneously (within 10 minutes). With these capabilities in mind, cryptocurrencies have already begun disrupting this industry. They reduce costs and improve speed significantly compared with traditional methods of transferring money overseas.
Payment Processing
The payment processing industry is an integral part of every business. So it’s not surprising that cryptocurrencies, as a superior alternative to traditional currency, have the potential to disrupt this industry.
Crypto assets are easy to use, have low fees, are fast and secure, and are anonymous if you choose. Moreover, cryptocurrency transactions are irreversible and transparent simultaneously, thanks to blockchain technology. Crypto is the best payment processing solution for merchants because it offers a lot of advantages:
- No chargebacks – chargebacks are not possible with cryptocurrencies because there’s no third party involved in a transaction;
- No middlemen – there’s no need for any mediator between two parties who want to exchange goods/services or money;
- Easy access – anyone can quickly buy, sell, and trade cryptocurrencies. There are hundreds of exchanges and trading solutions to choose from.
Cryptocurrencies are disrupting many industries
Cryptocurrencies have the potential to disrupt many industries. The financial services industry is one of them. Cryptocurrencies offer consumers an alternative to traditional banks, which often charge hefty fees and don’t offer the best interest rates on savings accounts.
Cryptocurrencies also offer a way for people who live in countries with high inflation rates or government-controlled currencies (like Venezuela) to protect their wealth from devaluation.
The banking industry has become increasingly digitized over time, driven by technological advances and customer expectations of faster transactions with fewer errors. Unfortunately, that can result in increased bank costs due to employee training expenses for new technologies and additional hardware needed to support these technologies.
Ultimately, customers will pay those costs rather than the overarching institution.
Conclusion
Cryptocurrencies can potentially disrupt many industries, but they can only do this if consumers adopt them.
For example, if remittance companies accept Bitcoin as a payment option in their apps, it will be easier for people from different countries to send money back home. There will be fewer fees when sending money with Bitcoin than with traditional banking services like Western Union or Moneygram.
Slowly but surely, mainstream adoption of cryptocurrency continues to accelerate. However, there’s still a very long way to go.
Disclaimer
Please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. CryptoMode is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.
