Cryptocurrency was the talk of the town a few years ago when Bitcoin captured the attention of media worldwide as people wondered if it would destabilise banking as we know it or strengthen the economy.
According to a Saxo Markets survey, only one in 10 Australians feel they understand what a cryptocurrency is, so before we jump into whether or not it’s here to stay, let’s break down its definition.
Cryptocurrency is a form of payment that circulate without the need for a government or bank. Instead, they are created using cryptographic techniques that enable people to buy, sell or trade them securely – making it near impossible to counterfeit or double-spend.
There are many pros and cons to using cryptocurrency instead of cash or card. Advantages can include protection from inflation, smooth currency exchanges, and easy transfer of funds, while disadvantages include potential risk of data loss, no refunds or cancellations and its power lying in few hands.
Despite the cons, demand for cryptocurrency continues to climb and with it goes the number of different cryptocurrencies. In mid-January 2022, there are nearly 17,000 being traded publicly and we only expect this to increase.
Adding to its popularity, Bitcoin, one of the most popular cryptocurrencies, was accepted in El Salvador and Cuba as a Legal Tender in 2021. with the likes of Paraguay, Venezuela and Anguilla being predicted as the next countries to accept Bitcoin as a Legal Tender. Contrastingly, China declared all cryptocurrencies illegal last year.
As we see more countries and companies start to accept cryptocurrency as a legal payment method and more investors put their money into crypto, we think it’s here to stay.
Whether or not it will take over traditional money is arguable, but love it or hate it, there’s no doubt we’ll be seeing more of it in the future.