Although a relatively new industry, the world of crypto is growing at a rapid rate and is taking the world by storm. With cryptocurrencies like bitcoin and Floki being poplar choices for those looking to invest their money and strive to gain, getting an understanding of the industry during its up and coming stage is a great way for businesses and individuals alike to get ahead of the crowd. As the world of finance is changing as we know it, we've pulled together some of the most notable differences.
The value of cryptocurrencies is based on the demand of the currency, varying based on buy much is invested into it. Unlike the value of traditional currencies, the fluctuation can change drastically by the second which can make it incredibly unpredictable. With factors such as market capitalisation, technology, media coverage and usage affecting the value, keeping a close eye on the market is essential to maintain a strong positioning.
Unlike regular currencies, crypto is not regulated by a governing body which offers a lot more freedom than traditional approaches. Standard currencies are influenced by government changes, such as inflation and the physical printing process when circulating, but the majority of cryptocurrencies are infinite so the risk of over circulation is eliminated.
With the cryptocurrencies being decentralised, there is a lack of regulation but this is starting to change as the industry grows. The public eye is paying more attention to the world of crypto so governments and regulating bodies are looking into ways of administering guidelines, subjecting profits to taxes in the same way as traditional currencies and creating daily withdrawal limits. If these regulations were not to be enforced, the millionaires and billionaires who have made their earnings from cryptocurrency could see a worldwide change of wealth distribution.
An ongoing debate is held around whether trading cryptocurrency for traditional currency defeats the purpose, leading to consumers exchanging their stocks or commodities to their national currency. With this approach affecting the longevity of crypto, it can make it a risky approach with bigger purchases as the value can go up and down drastically. For businesses such as car dealerships and property agents, the profit margins of accepting cryptocurrencies can be vast but on the other hand, there is also a great deal of risk involved in the current market.
With the industry growing at such a rate, looking ahead offers a whole world of potential which could completely change the world of finance as we know it. By disrupting conventional currencies and regulations, largescale business approaches are beginning to change as many consider accepting crypto as a payment method. With the ability for consumers of all kinds to access the global payment system wherever they are in the world, common problems such as credit history and bank accounts are eradicated. The only main restriction for those looking to invest into cryptocurrency is technology; with an internet connection and a PC, laptop or mobile, consumers and businesses across the globe can get involved.