The Impact Of Cryptocurrencies On
Cryptocurrencies are digital or virtual stock markets secured by cryptography. Cryptocurrencies are decentralized in nature and to know the impact of cryptocurrencies on developing nations it is necessary to understand the advantages and drawbacks presented by cryptocurrencies to it's users compared to fiat stock markets such as the naira and dollars issued by a central banks.
And it also is pertinent to note that all cryptocurrencies function on the blockchain and the first ever crypto currency in existence till date is bitcoin and it is the largest cryptocurrency in terms of market capitalization and also in terms of recognition and acceptanceCrypto stock markets have widely been considered as a device to support the growth process in developing countries. This formulate focuses on the impact of cryptocurrencies on developing countries, hence it focuses not just on individual impact but also the impact cryptocurrencies have on businesses with the use of showing the number of choices attainable with cryptocurrencies.
Pros and cons of cryptocurrencies when compared to fiat currency
Cryptocurrencies have their dark sides as some would like to say. But its benefits and their affect developing countries cannot be over highlighted. Hence we might take a look at the pros and cons of crypto stock markets compared to fiat stock markets which are a centralized system of finance.
The first advantage we might be looking at is it's openness, record data of cryptocurrency transactions are readily available on the blockchain and accessible to everyone, therefore transactions cannot be altered by individuals or organizations. Hence cryptocurrencies openness greatly decreases the risk of fraud and file corruption.
Cryptocurrencies are not government regulated and as such eliminates unnecessary charges like the electronic transfer service charge, thus the cost of transactions are very low when compared to fiat stock markets. Also because they don't require offline building neither doest is it require the services of employees and the wages that accompany it, hence the cost associated with these naturally morph into low transaction fees.
Another selling point of cryptocurrencies on global financing is its capacity to serve as fast and secured means of payment which are inter line transfer timely and more convenient. Cross-border payments can be reported to be the most significant use case for cryptocurrencies, due to the reduced transaction time and costs. Cryptocurrencies are decentralized and not government regulated, there is no geographic limitation so because of this cryptocurrencies can facilitate global transactions at very low cost without any mediating institution.
Also cryptocurrencies support financial addition, which is a major impact of cryptocurrencies on developing countries as these nations lact basic banking services. Cryptocurrencies are a lot more accessible and include an ease to use ledger live platform without much requirement when compared to banks and other financial institutions. Plus there are a lot of applications and programs that facilitate the use of cryptocurrencies and bringing them closer to the unbanked.
However with the easy inter line exchanges and the anonymity cryptocurrencies offer it's users can also facilitate money laundering and terrorist acts. Cryptocurrency's independent line payment makes it easy to move money across line even money gotten from illegal activities and money designed to fund terrorism can be move swiftly without interference from financial institution or government regulation as opposed to fiat currency where the money has to go through the banks and individual identity vetted through KYC.
The high volatility of bitcoin and cryptocurrencies in general is quite alarming which has led to cryptocurrency ban in some countries. However a major characteristics of money is its general acceptance regardless of region or tribe, though it is without doubt that bitcoin has gained global recognition and acceptance to a large extent, nevertheless there countries where the use of bitcoin has been banned and not accepted as a form of payment, also countries where strict regulations have been executed to prevent the risks associated with cryptocurrencies, makes it arguable if cryptocurrencies actually meet every criteria for it to be used as an approach of exchange.