These days, it seems like people just can’t stop talking about cryptocurrencies like Bitcoin and TrustToken. On one end of the aisle, you’ll hear that cryptocurrency makes perfect sense for our current financial markets and should be integrated into them as soon as possible. But on the other side of the conversation, people are worried about its volatility and viability in the international markets.
All of these are valid points, but if you’re not familiar with cryptocurrency, it can be difficult to weigh in on these conversations. That’s why today, we’re going to arm you with the knowledge you need when it comes to understanding how cryptocurrency is challenging the status quo, and what it means for the future of finance.
1. Instant Settlement
If you’re like most people, there’s a good chance you don’t really operate in the world of major investments on a regular basis. But make no mistake: even the average person is going to benefit from the concept of instant settlements. To understand why, we first need to look at the system in place today, as it relates to the settlement of major investments.
For the sake of keeping things simple, imagine that you had just decided to buy a house. Home ownership is great, but there’s no getting around the fact that it’s expensive. And we’re not just talking about actually owning the home either. It turns out that buying the home itself can get pretty expensive too.
The reality of buying a home is that, as it stands today, you can’t just walk in with a duffle bag of money, shake hands and walk out. If you want to legitimize the transaction, there are currently a series of costly steps you need to take before you can call that home your own. Third parties have to be involved in the process (lawyers, notary, etc.), whether you like it or not.
Aside from being tedious and time-consuming, these services can cost you quite the pretty penny. What’s worse, you’re essentially just paying for the right to spend your money on something. But what if that didn’t have to be the case? What if you could deal directly with the relevant parties and settle the transaction without having to worry about red tape and unnecessary expenses?
Cryptocurrency by its very design allows for instant settlements of any transaction, no matter how big or small, with no lawyers, no notary — just you and your new home. Of course, the scope of this is much wider than just home ownership. Its impact will likely be felt throughout the stock market, loans, and a variety of other financial markets as blockchain technology becomes more popular.
If we’re going to discuss the future of finance, it’s important that we take some time to analyze how our current financial markets operate. More specifically, we need to consider the implications of relying on centralized organizations. Right around this point is where the rebellious cryptocurrency advocate starts trying to shame corporations, making ridiculous claims about the nature of the financial markets.
Instead, we’d like to highlight a reality of working with centralized organizations and how the use of blockchain technology and cryptocurrency can help simplify and enrich the lives of the average person. Let’s say that you’re a forward-thinking individual and you keep nearly all your liquid cash in your Paypal account.
As far as you can tell, there’s really no downside to it. You get access to debit cards, credit cards, and a well-integrated online payment system. And that’s all great — until one day, you go to check your account balance only to find that your account has been frozen. From here, the customer service roller coaster ride starts. Once you finally manage to get ahold of someone who knows what’s going on, you find out that your account was flagged somehow for violating their User Agreement.
Whether your account actually violated it is irrelevant. The reality of your situation is that, if you want access to your funds again (even if you’re willing to cancel your Paypal account to get it back), you’re going to have to deal with all of their red tape and jump through all of their hoops.
To be fair to Paypal, there’s not much they can really do for you at that point. They have interests that they need to protect (namely, their own) and that occasionally means determining whether or not you violated their terms of service.
But that doesn’t mean that you have to put up with it. There’s no reason that you should be forced to give up autonomy over your own money. The beauty of cryptocurrency and blockchain is that your money is always yours. By design, there is no company with private interests to protect. It’s just you and your money — that’s it.
What are your thoughts on the state of cryptocurrency today? Share with us in the comment section.