by Jake Wengroff
If you’ve considered investing in crypto or supporting crypto at your organization, you’ve likely asked yourself, “what are the benefits of cryptocurrency?” Without a central authority, payment processor, or one single owner, cryptocurrency delivers innumerable benefits for both individuals and companies seeking new ways to invest and transact with crypto. Here are the top eight benefits of cryptocurrencies.
1. Ease and Simplicity
Without the need to visit a bank branch or ATM, crypto transactions are much easier than those based on cash or fiat currencies, like the dollar or euro. Crypto markets also trade 24 hours a day, seven days a week, without exception.
Cryptocurrencies tend to make for more secure forms of payment because the blockchain itself cannot be hacked. People tend to think of crypto as riskier when it comes to transactions; however, the risk in crypto lies with the underlying security of the wallet, platform, exchange or services provider used to move crypto.
3. Short Settlement Times
Payments for most crypto assets settle in seconds or minutes, rather than the customary 2 days for stock and bond transactions, or even longer for merchant accounts to settle.
4. Exponential Industry Growth
The cryptocurrency industry has been one of the fastest-growing markets that most of us have seen in our lifetimes. Being involved now might reasonably be compared to being involved with companies on the leading edge of the internet back in the 1990s and early 2000s.
The total market cap of the cryptocurrency market in 2013 was about $1.6 billion and it rose to over $2 trillion in April 2022.
5. Outsized Returns
Bitcoin has been one of the best-performing assets in recent years. Its price has appreciated over 3,000 percent in the last five years. By comparison, the S&P 500 index of stocks returns an average of about 8 percent per year. The interest in Bitcoin has also led to explosive interest and growth in other cryptocurrencies.
6. Portfolio Diversification
Cryptocurrency has come to be known as a non-correlated asset class. Crypto markets largely function independently of other markets, and their prices tend to be determined by factors other than those affecting stocks, bonds and commodities. In this way, investing in crypto is a great way to diversify your portfolio.
7. Hedge Against Inflation
Because monetary inflation can occur when central banks and governments print more money, because the government increases the supply, cryptocurrencies can never be subject to inflation. This is because crypto’s value is not based on a central government controlling its supply.
When an asset is more scarce, it tends to appreciate in value. Further, the Bitcoin protocol is also designed to keep those coins scarce regardless of what happens with monetary policy.
8. Cross-Border Payments
Cryptocurrencies are borderless, and so payments between countries do not carry any sort of exchange rates, limits or fees imposed by a government. While an exchange may have its own requirements and restrictions, in theory, crypto can be traded for free.
Keeping Crypto Safe Across Platforms, Wallets and Services
Accessing and transferring crypto between different wallets, platforms and exchanges can be risky. While it’s difficult for the blockchain or ledger to be hacked, the platforms on which crypto transactions take place can be subject to a breach. Once a cybercriminal obtains a crypto’s private key, it may be hard for the real owner to have recourse or even prove their ownership.
The industry needs market-driven solutions that can keep up with the ever-complex marketplace of crypto assets. TransitNet is creating the industry’s first third-party title registry that demonstrates proof of ownership of crypto assets, to add a layer of protection for investors in digital currencies and other crypto assets.
Join the forefront of the new crypto infrastructure. Request an exclusive registration for TransitNet’s title registry when it launches today.
Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, he covers such topics as security, mobility, e-commerce and the Internet of Things.
Deloitte – The rise of using cryptocurrency in business