Cryptocurrencies have come a long way since their inception, evolving from currencies used primarily in underground internet transactions to becoming a viable investment option for even the largest institutions. The magnitude of the changes they have brought to finance is undeniable.
While cryptocurrencies have gained widespread adoption and support, some skeptics question their long-term viability. The debate surrounding cryptocurrencies persists, with some hailing them as the future of finance and others dismissing them as a speculative bubble.
While some continue to dismiss cryptocurrencies, there is mounting evidence of their real-world utility. In the following sections, we will discuss some of the ways in which cryptocurrencies are already making real-world impact.
Safe Haven in Emerging Markets
Cryptocurrencies have already acted and continue to act as a safe haven in countries where the local currency is unstable and unreliable. They serve as protection from currency devaluation caused by either or a combination of inflation, political instability, poor economic policies, or geopolitical tensions. Time will tell if it will also act as a safe haven in major economies during times of uncertainty caused by the same factors.
Efficient and Cost-Effective Remittance Solution for Migrant Workers
Cryptocurrencies have proven to be a viable option for sending money overseas, particularly for migrant workers who face exorbitant fees charged by intermediaries. Additionally, cryptocurrencies offer a faster alternative to traditional remittance services, which often take several days to complete.
However, one potential risk is the sudden fluctuations in the cryptocurrency price, which can be triggered by events such as regulatory changes or market sentiment. Despite this risk, cryptocurrencies continue to gain traction as a fast and low-cost alternative for remittances.
Cost-Saving Alternative to Payment Networks
We've been hearing a lot lately about the detrimental high fees payment networks charge small businesses to accept card payments. These fees have even sparked disputes, causing one major retail chain to refuse to accept cards from a particular payment network.
More and more businesses are embracing cryptocurrencies not just to expand their customer base or offer additional payment options, but also to reduce the costs associated with accepting payments. In fact, some businesses are now offering discounts to customers who use cryptocurrencies, which typically have lower transaction fees, allowing them to pass on the savings to their customers.
Due to the reasons stated above, it's hard to imagine that cryptocurrencies will go away anytime soon. However, it remains to be seen how far cryptocurrencies can go in functioning as a widely accepted means of payment for goods and services. There are still many hurdles to overcome, particularly with regulations.