Bitcoins, on the other hand, will become more valuable over time as the limit is neared, making them a deflationary currency. Traditionally, inflation devalues money based on the premise that banks are always creating more of it, so its value drops. For instance, bitcoin has a maximum number of coins that can exist (21 million), which means there is a fixed supply. No inflation: Many digital currencies are not subject to inflation by design. This is different to traditional institutions who often put barriers in the way that limit accessibility, whether that’s a credit check or a minimum contribution. Anyone in the world with an internet connection can log on and acquire funds or mine for their coin of choice. Digital currencies offer direct transactions with anonymity that means your personal information never needs to be shared.īetter accessibility: One of the big advantages of digital currency is the accessibility it offers. Protection against fraud: Buying things online in the usual way means that your personal and payment details are stored by companies, leaving them vulnerable to fraud if they’re ever stolen. Legacy institutions simply can’t offer this level of service. This means you can look and see where your money is at any time thanks to the records stored after every transaction. Payment tracking: Digital currencies are designed to offer transparency for tracking funds in the way that they’re designed, especially cryptocurrencies that use blockchain technology. You can have complete ownership of a digital currency and use it however you want, in most cases with zero fees. There are also often fees for spending your money abroad. No fees: Though the money in your account is technically yours, banks still need to make a profit by charging you the likes of ATM fees, transfer fees, and closing fees. For instance, transferring funds overseas can sometimes take days for the money to be released into the receiver’s account through a traditional bank, but digital currencies make this much quicker, if not immediate. What are the benefits of digital currency?įaster transactions: Digital currencies allow for much faster transactions than those performed through traditional financial institutions. Let’s take a look at some of the pros and cons of digital currency in more detail to understand why some people are all for its use, and why some are still against it in certain circles. This means that digital currencies are under more scrutiny than ever as those governments, financial authorities, global corporations, and banks that make decisions begin to take them seriously as a solution for the future.ĭigital currency can offer a wide range of advantages over traditional methods of payment, including faster payments and greater transparency, but there are also some drawbacks to take into account as well, like security issues and how volatile some currencies can be. At the same time, more people are living a cashless life and the cryptocurrency boom is very much happening. Physical cash is still widely circulating, and governments and banks are still yet to make the leap to issuing a central bank digital currency. Ideas: The pros and cons of digital currency Currently, we’re at a bit of a crossroads when it comes to digital currency.
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