Bitcoin was one of the hottest topics of 2017. But what are the actual benefits of cryptocurrency?
And what's all the hype about?
Well, there's plenty of 'em.
And in this guide, I'll run through 40 advantages of crypto - plus some of the top FAQs too.
Read on or skip to the section you're interested in...
Note: Before you go on, it's important to realise cryptocurrency is far from perfect.
Cryptocurrency is an emerging technology, in the very early stages of development.
There's also plenty of disadvantages too. I'll run through those in a future article.
Unless you reveal your public key, your identity isn't tied to your cryptocurrency tokens.
Let's take Bitcoin for example.
Your name isn't directly tied to the Bitcoin you own. It's still a transparent network, but you can remain anonymous too.
It's not like a bank account where your name, address and phone number is on the statement.
But what if you don't want anyone to see your cryptocurrency transactions, even if your transactions are anonymous?
That's where privacy coins come in.
Privacy coins are designed to make your transactions completely untraceable.
3. Transaction Speeds.
OK, so this doesn't apply to all cryptocurrencies.
And one of the classic criticisms of Bitcoin is it's lack of scalability.
But cryptocurrencies like OmiseGo and Stellar are planning to rapidly increase transaction speeds.
The technology isn't there yet - but it will be soon.
In fact, this would allow mass transactions on a scalable level.
In other words, cryptocurrency could easily hit mainstream usage at that point.
The technology behind pretty much every cryptocurrency is the blockchain.
This allows transactions to flow and be validated on a peer-to-peer network. It's like a public ledger.
But the blockchain isn't just limited to cryptocurrency:
The blockchain could be advantageous in any transaction where there's a form of exchange.
For example, real estate, ecommerce and even voting systems.
Some even argue that blockchain technology will eventually eclipse the cryptocurrency market.
5. It's Exciting.
Watching the growth of cryptocurrency is like watching the birth of the internet all over again.
Sure, it's not quite ready yet.
But if you look at some of the amazing upcoming projects in the blockchain/cryptocurrency industry, then it's hard not to get excited about it.
And this leads me to my next point.
There will be opportunities within the cryptocurrency industry.
Plenty of them in fact.
And I don't just mean for crypto geeks.
The growth and money within the cryptocurrency industry could lead to big things for anyone who's willing to take their chance.
Entrepreneurs. Programmers. Content marketers.
7. Cryptocurrency Will Change The World.
One of the biggest benefits of cryptocurrency is it's overall potential.
Just as the internet has completely changed the way we do things, cryptocurrency could too.
Here's a few examples:
- Privacy: With the introduction of GDPR and numerous high profile scandals surrounding privacy, cryptocurrency could help us protect our confidential information online.
- Money: Money makes the world go round. We're obsessed by it. Cryptocurrency changes the way we value, interact and utilise money.
- Efficiency: People crave productivity. We're constantly trying to save time and that's why companies like Uber and Airbnb have profited so much. Many cryptocurrency projects cut out the middlemen, taking efficiency one step further.
Corruption is a big problem.
I'm not talking about conspiracy theories here. But there are prosecuted legal cases where those in power have taken advantage.
Most cryptocurrencies are focused on decentralizing their networks.
That means no-one can influence the value of the coin or corrupt the process.
Cryptocurrencies can't be controlled because there's no overarching authority.
9. Anyone Can Access Cryptocurrency.
The central philosophy of cryptocurrency is it's liberal vision.
Cryptocurrency doesn't discriminate:
Gender. Race. Nationality. Location.
It doesn't matter who you are, cryptocurrency is available to everyone.
10. Cryptocurrency Counters Identity Theft.
This isn't just a 'nice' benefit of cryptocurrency, it could save lives too.
Take projects like VeChain.
VeChain could actually prevent counterfeit products.
Their project creates a process where you can track items at every stage of the process transparently.
But how does this work in action?
Let's take alcohol for example.
In developing countries, counterfeit alcohol is a huge problem. The product looks exactly like a legit bottle, but once loaded with anti-freeze and other toxins, it's deadly.
In fact, counterfeit alcohol kills thousands of people every year.
VeChain's project means alcohol products can be checked and validated by anyone, simply by scanning the product's packaging information.
11. No Chargebacks.
If you're a business owner, you may already know the pain of receiving a payment dispute via PayPal or Stripe.
And that's the problem with third parties.
Even if you deliver an amazing service or product, sometimes you can still get burnt.
But with cryptocurrency, there's no chargebacks.
Once they're put into action, transactions can't be reversed.
12. Asset Transfers Made Easy.
Let's say you're trying to sell your real estate.
We all know that it's an arduous, long and drawn out process. In fact, it's one of the most stressful events we can have in our lives.
With cryptocurrency, real estate transfers and other assets could happen smoothly in a matter of minutes.
No BS. No bottlenecks.
Just a more efficient way to transfer assets from one person to another.
13. International Trade.
Ever tried to transfer money internationally?
It's expensive. It's time-consuming. And it's hardly convenient.
Transferring money internationally can take days, and often there's a lot of fees.
And one of the biggest problems is that this often affects those who have the least:
Those in third world countries who work abroad to send money to their families back home.
That's the beauty of cryptocurrency.
If businesses started accepting Stellar (XLM) for example, there'd be one single currency that's universal around the globe.
International transfers would take a matter of minutes - and fees would be minimal.
14. More Control.
If you have access to your private keys, you have complete control of your money.
In a world where Governments can shut down your account, cryptocurrency puts the power back in your hands.
That means your money can't be controlled or interfered with by a third party.
Pro Tip: Holding your own private keys is essential. If you leave your money on an exchange, you're vulnerable to hacks.
That's why I'd recommend using a hardware wallet.
Let's be honest, banking hasn't moved on much for a while now.
And that's because it's not an industry set up for innovation.
However, cryptocurrency is a technology that's constantly adapting. It doesn't stand still - in fact, it can't afford too.
The most successful cryptocurrencies have constantly released new updates, smarter technology and are forever developing better ways to operate.
It's no secret.
Investing in cryptocurrency is advantage for any VC interested in exploring new avenues.
However, if you're looking for a get-rich-quick scheme, cryptocurrency isn't for you.
Investing in cryptocurrency takes a lot of skill, knowledge and a strong mindset.
17. Cryptocurrency Revolutionises The Current Financial System.
Now, I'm not saying ditch your bank account for a Bitcoin wallet.
However, there's a few fundamental problems with the current financial system that could be fixed with cryptocurrency.
Here's a few examples:
- It removes the financial hurdles many people face in poorer countries - such as getting a bank account.
- There's no chargebacks with cryptocurrency.
- With cryptocurrency, there's no middleman, third party or bank handling your money.
- No one can freeze or limit your account. For example, in Greece during the financial crisis, banks limited ATM withdrawals.
Cryptocurrency is more than just money - it's a passion.
People love the vision of cryptocurrency.
That's led to huge communities gathering online, that anyone can join.
So why is that a benefit?
- You can meet like minded people.
- You can become a part of a project you love.
- You have the chance to make a genuine difference.
19. Democratic Systems.
Where there's a cryptocurrency community, there's also a democracy.
Let's look at Bitcoin.
Bitcoin has a development community called Bitcoin Core.
Anyone can join it.
That means you can view, read and even modify Bitcoin's code.
Then if there's a democratic consensus that your changes should be implemented, it will go live.
Obviously on a project like Bitcoin, that's quite rare. But smaller ICO projects and new development communities are being released all the time.
20. Optional Transparency.
Coming back to the topic of privacy coins, many of these coins come with optional transparency.
That means you have the choice:
- Would you like your transaction to be completely anonymous?
- Or would you prefer a transaction to be transparent?
It's another cool advantage of cryptocurrency.
21. New Industries.
From the growth of cryptocurrency and the blockchain, new industries will arise.
Many of them we won't even know about yet.
Billion dollar industries like Ecommerce, Social Media and SEO weren't really imaginable before the internet.
So if cryptocurrency really is just as disruptive as the internet, imagine what could be achieved.
22. More Jobs.
As new industries emerge, so will new jobs.
Cryptocurrency could create thousands of jobs, helping economies around the world.
One of the biggest benefits of cryptocurrency is that it encourages innovation.
And where's there's innovation, there's breakthroughs for humanity.
Every time a new revolutionary technology comes along, it breeds a new wave of creativity.
And that's no different for cryptocurrency:
- Communication and private messaging could transform with the blockchain.
- Industries that were growing stale will be challenged with new innovations.
- Entrepreneurs and new businesses will invent new creative ways of doing things.
24. Become A Part Of Projects You Love.
There's a reason why crowdfunding is so popular.
People love funding projects that they're passionate about.
And the same is true with ICOs.
ICOs raised hundreds of millions of dollars in 2017, and that trend isn't showing any signs of going away.
Warning: Crowdfunding cryptocurrency projects is exciting, but don't get carried away just yet.
80% of ICOs are scams. So it's important to be diligent when picking an ICO to invest in.
25. The Vision.
Who doesn't want to see a world where there's a fairer, more liberal way to distribute wealth?
After all, most of us worry about money.
Since the launch of Bitcoin's whitepaper, the underlying mission of cryptocurrency is one most of us can relate to.
26. Cut Out The Middleman.
If you didn't need to pay fees to Airbnb, PayPal or eBay, would you still do it?
Yep, that's right.
Cryptocurrency cuts out the third party middlemen.
With smart contracts, peer to peer networks and other new efficiencies, this technology eliminates the need for a middleman.
27. Lower Transaction Fees.
International payment services like Western Union and PayPal charge a hefty amount.
After all, you're simply sending money from one place to another.
Whilst cryptocurrency still charges transaction fees, some cryptocurrency payment platforms like OmiseGo and Stellar are trying to cut transaction fees as much as possible.
28. It's The Future.
Money is going digital people.
We've already seen some countries almost cut out cash out payments completely.
So whether it's Bitcoin, or one of the other 2,000+ emerging cryptocurrencies, a cashless society is the future of money.
We live in a world that's never been so connected.
Like Facebook founder Mark Zuckerberg stated, technology is "bringing the world closer together."
And that's because of globalisation.
International barriers are breaking down and the world is becoming more of a connected, global network.
Cryptocurrency could be another advancement in the world of globalisation, removing the international boundaries between currencies.
30. Tracking Your Financial History.
The blockchain creates a public ledger of all transactions.
And once a transaction is processed, this ledger can't be changed.
It's verified and validated by a peer to peer network.
That means that when you know your cryptocurrency wallet's key, you can see every transaction, payment and other useful details across the ledger regarding your own finances.
This makes it easier to track your financial history and gives you more visibility.
31. It's Constantly Evolving.
What's in it for you?
Because cryptocurrencies are becoming smarter, more useful and more convenient to use.
We're right at the start of the cryptocurrency movement, and there's a long, long way to go.
But at the same time, everyday there's new developments and updates within the industry.
32. 24/7 Market.
Stock markets have operating hours. And they typically close during the weekends.
Whereas cryptocurrency markets run 24/7. Plus you can trade completely online.
It's hardcore mode.
So if you're a trader, that's something you can take advantage of.
You don't have to be sat behind a screen for certain hours per day. Instead, you can trade when and wherever you'd like.
33. Cryptocurrency Helps Those Without Bank Accounts.
Did you know 39% of the world doesn't have a bank account?
Some people can't have a bank account, some don't want one and others struggle.
But this creates barriers between countries. Plus it means some businesses struggle to accept payments, and so they miss out on opportunities.
With cryptocurrency, you don't need a bank account. You just have a wallet, where you store your tokens.
34. Capture More Sales.
With new payment channels, comes new business opportunities.
So when cryptocurrency becomes more mainstream, businesses will prosper.
That's especially true for ecommerce businesses, where some customers may not have a bank account but do have a cryptocurrency wallet.
35. Consumers Will Have More Options.
You've heard the saying adapt or die right?
Just like how amazon thrived after the explosion of ecommerce, businesses will be able to evolve and grow as they adapt to consumer preferences towards cryptocurrency payments.
There are already over 2,500 cryptocurrencies out there, and that will continue to grow.
36. Technical Barriers Will Be Overcome.
Right now, cryptocurrency isn't all that convenient.
For example, most websites would struggle to implement a payment gateway for cryptocurrency payments.
Stripe actually removed their compatibility with Bitcoin.
But as the technology matures, technical problems like these will be removed.
And that means more simplicity, less problems and more mainstream adoption.
37. Cryptocurrency Will Become More Convenient.
The more mainstream cryptocurrency becomes, the more benefits people will gain from it.
So as it becomes more and more accepted, the advantages of cryptocurrency will grow.
- It will be easier to use
- It will become more accepted
- Its usefulness will grow
The more momentum and adoption cryptocurrencies gain, the more useful they'll become.
As an investor, if you're looking to diversify your portfolio then cryptocurrency could be a useful option.
After all, some theories even state that if there's another financial crisis, cryptocurrency could grow as an alternative investment.
(That's purely speculative though.)
If you can diversify your portfolio between online and offline investments, you'll be able to spread the risk.
Pro Tip: Be careful out there folks, the cryptocurrency market is volatile.
Just because you're diversifying your portfolio, doesn't mean you're safe.
39. Integration Between Blockless And Blockchain Companies.
Cryptocurrency is dynamic.
In fact, blockchain and blockless companies can still integrate.
Cryptocurrencies like IOTA are developing ways to achieve this. This creates more seamless integration between the business world.
40. Everyday, This Industry Grows Bigger.
The total market cap for cryptocurrency in 2013:
And the market cap end of May 2018:
This industry is growing, like crazy.
So why is that a benefit of cryptocurrency?
More money means that more projects, ideas and creative technologies will arrive in the cryptocurrency space.
What Are The Key Benefits Of Cryptocurrency?
Whilst I’ve listed over 40 benefits of cryptocurrency, the key benefits of cryptocurrency are decentralization, privacy and security.
What Are The Benefits Of Cryptocurrency In Comparison To Fiat Money?
Fiat money (offline currencies) aren't decentralized. That means they're at risk to the corruption and external influence of a third party.
In comparison, cryptocurrencies are completely decentralized. No one can control a cryptocurrency's value.
What Are The Business Benefits Of Cryptocurrency?
The business benefits of cryptocurrency include:
- No chargebacks: This also prevents fraudulent transactions.
- More customers: Consumers without bank accounts can still use cryptocurrency.
- Ecommerce opportunities: The blockchain could seriously help the ecommerce industry grow and discover more opportunities.
- No third party: Meaning businesses don't have to worry about a third party such as PayPal or Stripe taking a slice of their sales.
- No fraud: The blockchain is validated on a public ledger, which can't be faked. That eliminates the problem of fraudulent purchases, which many business owners face.
What Are The Benefits Of Mining Cryptocurrency?
People mine cryptocurrency because it's fun, rewarding, profitable (sometimes) and they get a chance to help a project they love.
However, the benefits of mining cryptocurrency depends on which cryptocurrency you decide to mine.
Some cryptocurrencies offer more mining benefits that others.