The growth of the economic significance of cryptocurrencies

December 2017 was certainly the year when Bitcoin fever was at its peak. Everybody was talking about it, everybody was buying or selling it and new cryptocurrencies were reveled every week. And, make no mistake, there is still a lot of buzz about cryptocurrencies worldwide. And, even if the bitcoin price has fallen by 65% in 2018, in 2019 it has already managed to bounce back to the value of 8,266,63 US dollars, becoming the second most expensive digital currency.

Nowadays, 2019 data from Statista shows that there is a number of 328,000 Bitcoin transactions every day. But why is there such a huge splash about cryptocurrencies? And how exactly did they managed to become so viral worldwide?

Most popular cryptocurrencies

A long, long time ago, you could count the number of types of cryptocurrencies on one hand. But then this spectacular decentralized market has grown so much that counting them wouldn’t be possible not even using both of your hands. Nowadays, the number of cryptocurrencies available in this market has grown to be over 1600 and still counting.

Although Bitcoin is the largest blockchain network at the moment, Ethereum and Ripple are rapidly following its footsteps. Most people know that the main purpose of cryptocurrencies is used to transfer value. But very little know that not all of them have the same operational purpose. However, their main purpose remains to help people to no longer trust and rely on banks to handle their money and, most importantly, private information.

The top three most popular cryptocurrencies used in this market include Bitcoin, Altcoins, and Tokens. It all started in 2008 when the bitcoin.org domain has been registered and the concept of Bitcoin has been revealed. Obviously, no one knew that this concept will be what it is today. However, in 2017, Bitcoin has become so popular that it has reached a value of $20.000 per Bitcoin.

Next, Altcoins have been created and they have entered the market as a similar but alternate version of Bitcoin. However, make no mistake, some altcoins are actually very different from Bitcoins and Ethereum and NEO are very good examples of different altcoins. If Bitcoin was created to be a digital currency, altcoins like Ethereum were actually created as huge platforms that allowed users to build apps on a blockchain.

Lastly, Tokens have also joined the cryptocurrency market and they are completely different from Bitcoin or Altcoins like Ethereum. If you have ever heard about decentralized applications, you must know that that’s where tokens are being used. They can be used to make transactions on dApp or to gain special advantages such as discounted fees. However, tokens go hand in hand with altcoins like Ethereum or NEO which are actually used to pay the transaction fees. 

Crypto payments on the rise

The idea of electronic cash isn’t new, especially not in today’s digital age. However, let’s explore the context of payment transactions nowadays. We are talking about payments through mobile devices and e-commerce that keep online shops open 24/7 which creates an environment where sales can happen at all times. Now, how did cryptocurrencies make their way in the payment industry?

As the digital currency market has grown, the number of companies accepting cryptocurrencies as payment methods has also increased. For example, did you know that major companies like Wikipedia, Microsoft, KFC, Overstock accept several different kinds of cryptocurrencies as payments for their goods or services and donations? Moreover, apart from worldwide known companies, there are also many small or medium shops that accept cryptocurrencies as a payment form for their products.

It isn’t quite a surprise that merchants are embracing cryptocurrencies as payment forms since customers are increasingly more interested in these digital currencies because they provide fast, easy, and safe payments.

Cryptocurrency investments

Although the cryptocurrency market is unregulated, which tends to convert it into a market with many ups and downs, investing in Bitcoins or other cryptocurrencies is a very popular activity these days. In fact, it seems that the fluctuation of the market on a daily basis isn’t actually bad enough to affect an investor’s portfolio. It usually only fluctuates by 1% or 2% every day.

One of the factors that made the value of cryptocurrencies rise so much was mainly the fact that they are untraceable and outside of the control of the worldwide governments. Moreover, the volatility of the market that sometimes makes the prices fall but as quickly it makes them raise so much that helps investors build wealth.

Are cryptocurrencies safe to invest in? In short, when it comes to investments, safety is out of the question. However, there are many things that investors can do to avoid losing their money such as making well-informed investment decisions and choosing a reliable broker. That being said, any type of investment, be it forex or cryptocurrencies, has an element of risk. What matters the most is that investors minimize the risks with their decisions.

In terms of investments, this market has grown so much that apart from the spectacular number of cryptocurrencies available, there is also a huge list of forex & crypto brokers from which investors can choose.

Thanks to the massive investment potential that cryptocurrencies offer, combined with the great privacy norms, they are certainly here to stay and continue to change the way people buy, spend, or store their money. but most importantly, they have already changed the way people invest their money and will continue to do so.

It is believed that cryptocurrencies have the potential to create a more borderless and globalized economy in the years to come. They have been created for a faster, securer, and frictionless way to store, spend or move value. And, make no mistake, cryptocurrencies are already challenging the traditional pillars of the financial and payment industry.