Today’s Digital Currency World
Just like purchasing a home or a car, people are planning to invest or buy a Bitcoin or any other crypto-currency for that matter carefully. For the past couple of years, we have been hearing a lot of questions and opinions about investing in different digital currencies which includes Initial Coin Offerings.
Whenever I think of crypto-currencies, I certainly see a revolutionary technology that is letting both people and institutions to immediately transfer huge amounts of the sum in a secured way without involving any middlemen. Already the digital currencies are already expanding international commerce, and very soon we can expect the digital currencies to support financial inclusion and completely turn around the way we shop, invest, save, and run businesses in ways we cannot even imagine how yet.
However, from programmable currency to innovative types of e-commerce, the below are a handful of ways in which the digital currency might transform the world:
1. Quicker, cheaper, and secure bank transfers
The way we or even transfers money is so obsolete. Some bank transfers even take a couple of days to complete the transaction, with correspondent banks and nation-specific clearing intermediaries involved on both sides. However, by using digital currency, bank transfers could be completed in no time as they are cheaper, safer, and quicker when compared to the conventional transactions.
Such transactions can also take place without involving the new currencies. Some technology companies let people send money globally support specific protocols which allow clients to send funds from one currency to another, i.e., Dollars to Dirhams utilizing a secure digital ledger. Their technology moves the client’s money from one corner to another corner of the world in minutes by first finding the most effective route between trading partners where the route may involve a couple of series of transactions among foreign exchange traders who hold bank accounts in multiple banks and later confirming all the necessary transactions concurrently.
2. An encouragement to global remittances
Every year, people send almost 500 billion dollars in the form of remittances from developing countries across the globe. This is the amount that can exceed FDI. With international fee varying from 5 to 10 percent for transferring 200 dollars, the number is quite a burden for normal people. Now, the emerging technologies have the potential to assist people in transferring the amount fast and cheap. Utilizing digital currency, even private users can transfer money directly whomever they want through smartphones, of course, with the only rest fee being those taken by the exchange platforms. While conventional money transfer companies had to have carry principal just in case of any delay in international money transactions, capital requirements are very much necessary for companies who use digital currencies.
However, minimizing the fee may make it simpler for small players to take steps in the remittance picture or for current players to make transactions possible in even small towns and extremely remote countries.
3. Safe money for the poor
Africa is one good example to show that the explosion of smartphone technology educated that even developing countries also eligible to lead when it comes to high-end technology. According to a source, more than 60 percent of commerce in Kenya is taking place through smartphone credits as a source of exchange. Everyone can store money and transfer credits to other users, but the only problem is that the fee is too high. Cashing out will cost nearly 20 percent even though the great embracement of the credits result in many customers spending the credits directly without having to pay large amounts in the form of fee.
In scenarios like these, digital currencies can become a safe and secure way of payment especially in nations where the majority of the citizens do not hold bank accounts. While utilizing Bitcoin as another currency in such nations would expose people in the country to a particular amount of risk, but still, it would be a better one when compared to the current options especially in high-inflation countries. For instance, it is safer than stashing hard cash at home or purchasing precious jewelry.<>
4. Discovering the potential of e-commerce
In today’s digital world, with the increase in the number of credit card frauds, it is becoming increasingly tough for online merchants to continue their good businesses. Moreover, that kind of fraud tends to happen even more in global transactions, and that is why many companies do not accept international payments. However, with digital currencies such as Bitcoin, the transfer cannot be reversed once it is completed. Now, this eliminates the chances for taking place a fraud for merchants and hence lets them sell across the globe.
Since virtual currencies allow customers to transfer funds just like an email or a message, online shopping soon turns into a much smoother and more straightforward process. Digital currencies can also let SMBs in developing nations to more interact on a global level in e-commerce.